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

To: bambs who wrote (36826)	6/1/2000 10:39:00 AM
From: michael97123	Read Replies (1) \| Respond to of 77400

I have to answer this one. It's a good question. CSCO management always has said growth will be 30-50% range. Last quarter was 55%(I believe), in a super economy. So eco slowdown will bring CSCO back into the range. But CSCO is in the fastest growing segment of the economy. So bulls expect upper end of the range and that's how the stock is priced. If there were a recession then there would be some pain but a recession is not in the cards.

To: bambs who wrote (36826)	6/1/2000 12:46:00 PM
From: JRI	Read Replies (1) \| Respond to of 77400

Bambs..the market seems to disagree (recently) with your thesis that slower growth is bad for tech stocks... Or is this all short-covering?

To: bambs who wrote (36826)	6/1/2000 3:51:00 PM
From: SyncMan	Respond to of 77400

re: "that the longs here are not willing to admit that CSCO's growth will slow down at all. It's clear the economy is slowing down. If it isn't, it will be made to with higher interest rates. I can't believe that no one here will admit that an economic slow down will affect CSCO's growth. I find it very funny. " I think the way to explain this is that people think that other industries are going to slow much much faster than Cisco/Nortel/etc. so that AG will back off before it ever gets to Cisco. Chambers has done a good job (as well as the internet) of showing enterprise customers that they NEED the internet (to cut costs, to provide better and cheaper customer service, to keep in better touch with thier customers, etc) so that even in a slowing economy, customer's will still be pounding on Cisco's doors because they have no choice. The same is true in the optical buildout. I don't think you seriously think that online usage, online entertainment, online gambling, etc. etc. are going to really slow down the clamouring of higher and higher speed communication network because the Fed funds rate has gone to 8.5%. We are talking about lots of purchases in the 10-50 dollar range. The fed funds rate has nothing to do with that. The holy grail of on demand video is not going to go away no matter what the Fed does. On the other hand, what will be hurt is producers of things that are routinely financed. I guess LU does have a problem with this, because they finance a lot of their customers purchases, but the real losers will be the automakers, the boatmakers, the housing makers. And when the housing makers get hit, the retails on the big end of the buying schedule. And of course from there we go to employment. All of this will happen at a certain level of interest rates. We will also see a lot of people start to move into Bonds, because stocks seem less attractive when bonds get to yields that are attractive. Now, of course, CSCO is a stock, so it's value might well go down too, but more important for CSCO might be that acquiring companies gets easier again. We all know how integral that is to CSCO's strategy. So, in short, yes, I expect Cisco's growth to slow from 55%. It would be quite amazing if it did not. But I expect it to continue to meet it's target of 30-50% growth for the forseeable future. I expect that as the market loses ground, that CSCO will hold up better than most. I expect that in the long run, this slow down may actually HELP Cisco's prospects. Of course, I expect that Cisco will become a player in the optical infrastrucure buildout.