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

To: JDN who wrote (34501)	4/29/2000 10:12:00 AM
From: lawdog	Read Replies (2) \| Respond to of 77400

JDN, I may be incorrect on this point, but weren't the Tiger Funds value oriented? Anyway hedge funds have their role in markets. They provide liquidity and reduce volatility by shorting overvalued stocks and going long undervalued stocks. Two possible problems: First, average investors (especially boomers who are getting ever closer to retirement) may decide that the markets are just to risky because of the gut-wrenching ups and downs. I know most average investors claim to be 'long-term' and are supposed to be much more sophisticated than in previous years. But the average investor is not likely to welcome huge swings in their portfolio values. This is Psych 101. Second, instability in financial markets may cause foreign investors to flee. Volatility increases risk. Higher risk makes markets less attractive (especially in a risk/reward evaluation). This could further the liquidity problem outlined above. We must have foreign dollars in our market in large amounts if we are to sustain valuations at these record levels. Watch for a weakening dollar for signs that this is occurring. I am certainly no expert on these matters, but it seems that the risks are there and are increasing. High multiple stocks, like CSCO, that rely heavily on their ability to print their own currency (options for employees and stock to purchase companies) could be hit the hardest. Look back during just the short bear period we experienced (not saying that it is over - I believe we are still in a bear market) and and see how employees reacted (they wanted cash) and look at the number of IPOs and secondaries that were postponed. What if this instability continues for months or years. It would not be pretty. These are macro problems and I know you are all more interested in discussing CSCOs latest high speed routers so I will leave it that. Best of luck.

To: JDN who wrote (34501)	4/29/2000 11:13:00 AM
From: pompsander	Respond to of 77400

JDN, totally agree on your analysis of market change. Speculation is, if not dead, badly wounded. One example...like many companies there is an investment club in my firm with about twenty young people (early twenties to early thirties) all of whom began to believe they were better than Buffett as their small portfolio exploded last year. They owned AMZN, EBAY, Dr. Koop, Peapod, and several more. Almost all net -almost none with earnings. As the market seemed to reward these companies, they bought more of them....or even more speculative ones. No CSCO, INTC, EMC or DELL interested them. Then came April. We had a little trouble keeping some of the young turks working in mid-April as the market tanked. Of course, they could not agree on a course of action, (sell, stop loss, anything) so they rode it down. Much anger and frustration at each other. Finally, capitulation at the events before them. They had some people pull out what they had left, others have influenced the group to look at real earnings growth as a mandatory element of any future investment. Their first buys in the "new era", CSCO, CREE and SEBL. A tough learning experience which I am sure was duplicated all over the country, but necessary.