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To: Chuzzlewit who wrote (12051)	1/5/2000 3:06:00 PM
From: Zoltan!	Read Replies (3) \| Respond to of 21876

>>I take it by your failure to respond to my challenge (Give me a rationale for CSCO's share price based either on projected earnings or cash flow together with long-term growth assumptions.) that you cannot come up with a decent valuation technique that accounts for CSCO's price per share. Since you endorse the current price I assume that you have a quantitative rationale behind your endorsement. I would love to see it. Potential cannot be gauged in the manner that you describe. That is what Doll was saying. I suspect that you would miss most great investment opportunities if you relied solely on what you see behind an accountant's visor. True vision requires that they be removed from time to time to see the larger picture and ultimately visceral vision to make the call.

To: Chuzzlewit who wrote (12051)	1/5/2000 3:18:00 PM
From: GVTucker	Read Replies (3) \| Respond to of 21876

RE: Valuation and concepts Chuzzlewit, it is practically impossible to justify buying CSCO based upon any rational discounted cash flow model. But that doesn't mean that it cannot be a good investment. Over the years, I have always been amazed at how some people can buy great but overpriced concepts and still make very good money. This investment style is decidedly NOT a buy and hold style, however. Over the long run, the concept of buy and hold takes over. In the short run (the short run meaning as long as two years), there are people that can take concepts and run with them. I have seen someone like Jeff Vinik or Richard Gilder continue to take positions that defy valuation, make lots of money, ride the psychology, and get out before the inevitable fall. This skill is something that I do not possess, and I'm amazed when I see people do it time and time again. I guess this is a fancy way of saying that the Greater Fool Theory does indeed work, but only if you are very adept at measuring how many Greater Fools are left. I am horrid at this, and thus am left to playing the value/cash flow game. There are others, however, that are very good at this game (and believe me, it truly is a game in this case) and my hat is off to those people.