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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 71.75

-0.5%

Nov 11 3:59 PM EST

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To: Mr.Fun who wrote (24716)	4/28/1999 2:54:00 PM
From: Chuzzlewit	Read Replies (1) of 77397

Mr Fun, we are in the midst of one of those awful "paradigm shifts" (don't you just hate it when your paradigms ain't worth 20 cents?). Balance sheet valuations never have and never will work for growth companies. I find your observation about price momentum very interesting because it seems to me to be coincidental with a tremendous shift into investing on the internet and increased daytrading. Whether there is cause and effect I don't know. But my guess is that momentum investing is beginning to hold sway. Frankly, I cannot imagine that this state of affairs will continue for much longer, if, for no other reason, the inevitable narrowing of the number of stocks reaching new highs. The added currency in these stocks will make mergers and acquisitions more likely and hence attract investors into likely acquisition candidates. That ought to at least mitigate the trend. Did you do the regression analysis, and if so, can you provide me with details of the model? What lag periods was used for the eps growth against stock price. I assume from your description that you regressed the sequential difference between eps growth (i.e. if growth were 25% in period 1, and 30% in period 2 you used 30%-25% = 5% as your momentum). Is that true? Did you include LT interest rates in the model? I have many more questions. TIA TTFN, CTC

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