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

To: RetiredNow who wrote (36871)	6/1/2000 5:22:00 PM
From: GVTucker	Read Replies (2) \| Respond to of 77400

mindmeld, thanks for the additional detail in your response. Here is where I see a contradiction: Now Cisco's cost of capital is not their borrowing rate, since they use their stock to acquire which is how they grow. So we'd have to look at opportunity costs, such as what if we invested the money elswhere. and And cost of capital won't be interest rates. Fixed income instruments are competitive securities with Cisco common stock. If rates rise, then the expected return of these fixed income instruments also rises. Thus, the opportunity cost of owning Cisco stock rises, going to your first statement. Which contradicts the second statement.

To: RetiredNow who wrote (36871)	6/1/2000 10:24:00 PM
From: Zoltan!	Respond to of 77400

Dow Jones Newswires -- June 1, 2000 Options Report: 'Napalm' Report Brings Out The Bulls By STEVEN M. SEARS NEW YORK -- The bears got hit with a napalm bomb. A report from the National Association of Purchasing Managers - which traders refer to as "Napalm" - indicated that six consecutive interest-rates hikes are starting to slow the growth of the U.S. economy, lessening worries about future rate hikes and the sustainability of recent stock-market rallies. "Size! Size! Size! All opening on the buy side," a pumped floor broker at the Chicago Board Options Exchange said early Thursday. Firms, identified only as major Wall Street investment banks, bought thousands of June and July call options on leading technology and large-capitalization stocks, including America Online Inc., Cisco Systems Inc., General Electric Co., Micron Technology Inc. and Microsoft Corp. The options orders, sometimes as large as 5,000 contracts, were the equivalent of hundreds of thousands of shares of stock. "Three days ago everyone was talking about the market getting smoked," the floor broker said. "I don't know what changed, but everybody's opening" positions. The fact that major firms were willing to wager millions of dollars in new positions on technology stocks was viewed as a sign by some traders that the stock market's rally was sustainable. Of course, all assumptions are up for grabs if Friday's release of monthly unemployment data is stronger than expected. "We need another week to really see," a CBOE floor trader said, though he was encouraged that options and stock volume accelerated Thursday. "If the volume catches up, I think the rally will be real," he added. Volatility, an important part of an options price that traders use to gauge how likely a stock's price is to move in either direction, has declined across trading floors. The option market's fear gauge, the CBOE's Market Volatility Index, or VIX, declined 0.64 to 25.93. Elsewhere in the options market: - The CBOE's equity put/call ratio was 0.39. The ratio is traditionally interpreted as a contrarian sentiment indicator, which holds that if too many traders are bullish, then the smart approach is to be bearish. Using this contrarian criteria, the index historically has been considered a bullish sentiment indicator if it is around 0.75 to 1; neutral from 0.40 to 0.75 and bearish if it is below 0.40. - The CBOE's index put/call ratio was 1.34. This ratio is also interpreted as a contrarian sentiment indicator. The index is considered bullish if the ratio is 1.5 or higher; neutral from 0.75 to 1.5 and bearish if it is below 0.75. - The International Securities Exchange plans to list three additional options classes Friday, bringing the total number of classes to six. The electronic options exchange plans to list Gillette Co., Kimberly-Clark Corp., and Unisys Corp. The ISE, which opened for trading last Friday, inaugurated trading in Alcoa Inc., LSI Logic Corp. and SBC Communications Inc. By the end of the year, the ISE plans to add 600 options classes that represent about 90% of the average daily trading volume in the options market. "When the pace of listings will change is when we start growing horizontal and vertical at the same time. When we add a couple of more primary market makers and bins" of other contracts, said Gary Katz, the ISE's senior vice president. interactive.wsj.com