Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: George Schulte who wrote (35210)	5/10/2000 1:07:00 AM
From: Eric	Read Replies (1) \| Respond to of 77397

George, A great observation. In the first 15 or so years I invested I paid a lot of attention to PE ratios and would not touch a "growth stock" with a ten foot pole! Anything with a PE over 15 I wouldn't even consider. Time and my understanding of technology changed that and especially my fathers influence changed my opinion of valuing companies. The hard part is looking for correlations and finding patterns that work in the "real world". When I was working in TV a co-worker constantly slammed the stock market as a gambling exercise and he wouldn't invest in it. He probably is still putting money into his savings account, that was back in 1983. Fear is necessary to protect ourselves as long as we grasp it's consequences and can control it. There are a lot of stocks that I was afraid to invest in over the years that made it big time. That helped teach me also. Unfortunately it takes years to learn this. I'm still learning! Eric

To: George Schulte who wrote (35210)	5/10/2000 1:13:00 AM
From: lawdog	Respond to of 77397

George, before you start investing I would read at least two books. Irrational Exuberance by George Shiller amazon.com and Dow 36,000 by Glassman and Hassett amazon.com

To: George Schulte who wrote (35210)	5/10/2000 3:58:00 AM
From: SyncMan	Respond to of 77397

Question if during the past 10 years that a lot of investors have made lots of $$$$$$ in stocks like Cisco Msft and Dell was there not doom and gloomers that complained that valuations was to large and the companies mentioned would be unable to meet their earnings The problem that most of the negative thinkers scare some small nvestors into selling anf there for miss out on large gains in the next several years Well, the obvious answer is of course. But it's a lot more complicated than that. For one thing, MS is a monopoly. Cisco has competitors galore. And sooner or later, valuations do get too high (short term look at 81) so that if you say it enough, you'll certainly be right. But that's not really the point, is it? Also, even stalwart bull's can't deny the fact that the Nasdaq is in what seems like a bear market, and that Greenspan seems to fear inflation at this time (I would never badmouth G, I think he's done a great job). So what to do? Move into cash and try to time the bottom? I think most people would agree that this is not very doable, although a lot of people like to try it. It's also called Market Timing. It usually results in Selling Low and Buying High. Or never getting in waiting for that big drop (when it does, they are too afriad to get in). People were afraid in 95 that the market was high. 96, 97, 98, 99, 00 (you can tell I'm not a fan of MT) Fear keeps people out of the market. Of course, if your stock goes up 120%, and then drops 30%, it's not a big deal is it? I guess you could stay in the market, but try to pull out of high tech. Of course, in this enviroment, I don't know exactly where you go (and it's still Market Timing). Long term, I am a bull. Invest in quality. Quality Tech, Quality Bio-Tech, Quality Retail. Quality. In the long term, stocks ALWAYS win out (past performance is no guarantee of future results). But also spread out. Small Caps, Foreign caps. I like index funds for this stuff. In the middle term - you shouldn't have any money in the market. Go to bonds. In the short term. Day traders are playing with fire. Go to money market funds. Of course, only you can decide what is short/middle/long. But long should probably be at least 10 years. Or at least 7? This is why short term criticism (why didn't you sell at 81) is ludicrous. If you are in it for 7 years, a 30% fall is NO BIG DEAL. The invitation to try to sell at 81 is to Market Time. And for the vast majority of people, that is a loser's game. (I'd love LawDog's response to this). Oh, and the one rule: One ring to bring them all together in darkness and bind them. NO NO, it's... Never Margin.