Cisco Systems, Inc. (CSCO) Message Board

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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 71.08

+0.1%

Nov 7 9:30 AM EST

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To: jach who wrote (24621)	4/25/1999 1:26:00 PM
From: Brian Malloy	Read Replies (2) of 77397

You keep doing this jach: In your own words: "Simple logic said CSCO is way overpriced." and you go on to talk talking about earnings and market cap and so forth and so on relative to IBM. However, you forget one key measure - something that an undergrad taking their first course in accounting or financial management gets drilled into their head. Without a relative measure such as ROI or ROE everything is just a number. If CSCO spends $1 and makes $1.40 while IBM spends $1 and makes $1.15 then perhaps that is why CSCO can carry a high PE? Your lesson is to read up on ROI and ROE and report back to the class. Also David Dreman, a great value investor, picks only two tech/inet stocks that may be appropriately valued given his models. They are CSCO and AMZN. Regards

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