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

To: John Malloy who wrote (33268)	4/1/2000 9:24:00 PM
From: Richaaard	Read Replies (1) \| Respond to of 77400

Great analysis of Cisco share price but some of us are too simple minded to crunch numbers. I just loaded up on Cisco stock on thursday at $72 for one simple reason, the price is going up. I know it, you know it, and nearly everyone that is involved with the market knows it. Hell, even the shorts probably know it by now. The end.

To: John Malloy who wrote (33268)	4/1/2000 9:52:00 PM
From: Gerald Walls	Read Replies (2) \| Respond to of 77400

Rather than worry about what P/E is appropriate for a stock that is growing as fast as Cisco, I prefer to calculate by discounted cash flow the most I can afford to pay for Cisco and still earn some minimum after-tax return. Cisco's value depends on how fast you forecast equity/share will grow and the price/book ratio will fall. Nice analysis, but, unfortunately, like all projections it's only as good as your assumptions. Plug in different numbers and you get wildly different results. I guess that's why we have some people screaming about how overvalued CSCO is while others are buying on margin. I bought Cisco three times in 1997, once just before The Great Tech Meltdown of '97, once about 2/3 of the way down about two weeks later, and once in the fall. My cost basis is under 8. Do you factor in holding period, initial cost, and taxes in your calculation or do you look at the current price only?

To: John Malloy who wrote (33268)	4/2/2000 3:42:00 AM
From: Kashish King	Read Replies (2) \| Respond to of 77400

John, stock prices are chaotic in the mathematical sense. They defy simple predictive models and algorithms created by the best mathematical minds have yet to create a solid model that holds up over time. So save the wear on your pencil and digest some simple facts. It's going to be increasingly difficult to grow the current 15 billion dollar revenue stream for a variety of competitive factors, even thought the product volume and breadth may increase. When revenues do flatten out the company will be worth what flat revenue companies of this size are worth: 2 or 3 times revenues in terms of their market capitalization. So tell us how CSCO is going to grow revenues from the astonishing 15 billion they now enjoy to 200, 500 or 1000 billion? You know, this is nothing more than a colossal gambling operation on behalf of naive investors. Simply stating that traditional valuation models don't hold is a convenient ploy to keep the house of cards standing. The current valuation has more to do with pokemon-like reasons than real valuation: a bunch of naive investors who don't actually have any clue what underlies the price of a share. The markets have turned into a Vegas-style casino and that is driving demand for stocks with little or no value. The stocks that have some value (like CSCO at 15 billion annual revenues) are being valued at 500 billion based on nothing more than empty statements about old valuation models being invalid. That bogus rationale is used regardless of where the stock is so the rationale is worthless. They just keep parroting the same old line no matter what the stock does.