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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Bill who wrote (33219)	3/31/2000 9:25:00 AM
From: Zoltan!	Read Replies (1) \| Respond to of 77400

A few t**ds in the punchbowl play a useful purpose sometimes, but that doesn't mean you have to take their drink. I especially like the one who sold Cisco when its PE was below 20 and offers that up as evidence of his acumen. The others coming are as predictable as the sunrise and sunset. As is their denouement.

To: Bill who wrote (33219)	3/31/2000 10:54:00 AM
From: Zoltan!	Read Replies (3) \| Respond to of 77400

Cramer on why he owns Cisco and its valuation: .....OK, here are my thoughts: First, as I have written and said so many times before, these valuations make no sense to me. But a lot of things make no sense to me. I can hardly say I ignore them. I look and think about them every day. I marvel at them. I have chronicled the rising price-to-earnings ratio of Cisco probably better than anyone, including John Chambers, the head of Cisco. The goal is not to dismiss the valuations of stocks; the goal is to figure out how they are being valued and exploit that for profit. But let's say that I decided, arbitrarily, that Cisco should never trade above a 30 multiple because, well, that's what it hasn't traded above in the past. Why is the past a good guide? In the past, our parents owned utility stocks. Were they wiser than us? In the past, we liked to buy companies with cheap multiples to earnings and hope they got dear. Now we like to buy companies that have high multiples to earnings and hope they get dear. That's all that has changed. As I have stressed over and over again, if buying slow-growing companies at cheap prices made you a ton of money, I would do it in a flash. The goal is not to dismiss the valuations of stocks; the goal is to figure out how they are being valued and exploit that for profit. Should the P/E multiple come down because it has historically come down before? Why? Why is the previous benchmark so right? Where is it written that P/E multiples have to contract as a company gets bigger? That's not a way to make money. That's a meaningless statement. And what about this claptrap that everybody owns it so what happens if they want to sell? Hold it, billions upon billions of dollars of stock are sold every day by people who don't want to own Cisco anymore. Billions. These markets are good for 1 million shares up, or you can buy or sell 1 million shares within a point of where Cisco is selling. Ten million? Still not a problem. These markets aren't thin Ponzi schemes that fall apart when somebody refuses to buy somebody else out. You can get out of billions of dollars of Cisco stock because it happens every day! I am not going to sell a stock for valuation purposes, and I am not going to short a stock because it is "overvalued." I am going to own stocks that raise the bar and sell stocks that can't. I am going to own stocks with great organic growth and sell stocks of companies that don't grow. That's the methodology. That's the dreaded "Church of What's Happening Now" that the non-stock-picking intelligentsia thinks is so important. I am not the one defending these valuations; I'm the one exploiting them. I invite you to exploit them with me. That's what this column is about. I am going to own stocks that raise the bar and sell stocks that can't. thestreet.com

To: Bill who wrote (33219)	3/31/2000 11:47:00 PM
From: Kashish King	Read Replies (1) \| Respond to of 77400

e-Bill, You said It is unfortunate for some that they miss opportunity by pegging their view of "valuation" to PE. So then you should have no trouble paying $320 right now for CSCO at a market cap of 2000 billion, that's 2000 billion. Forget the PE, assume they earn a fraction of one cent per share and PE rating of 40,000,000 or so. It's not the PE it's the price relative to the revenues that has me concerned. Good companies of this size can get from 2 to 3 times annual revenues, CSCO is trading at over 30 times annual revenues. No batter how good things are it will never justify this price.