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

To: RetiredNow who wrote (39884)	9/14/2000 10:06:57 AM
From: Tony Viola	Read Replies (1) \| Respond to of 77400

mindmeld, thread, pretty good article from the San Jose Mercury News: "Three theories on Cisco stocks' afflictions -- and what they're worth" mercurycenter.com Tony

To: RetiredNow who wrote (39884)	9/14/2000 1:45:02 PM
From: Stock Farmer	Read Replies (1) \| Respond to of 77400

mm: peace. My intent is not to sanction the speculative sale and purchase of pieces of paper, nor to imply that such a strategy is "better" in the long term. Indeed, the odds are clearly otherwise. We are agreed. Proof? My own investment strategy is based on long term accumulation, capital preservation, and income to fuel a series of opportunistic moon-or-bust gambles. All long term. Has worked quite remarkably well. That being said, my previous posts were to establish as a fact that CSCO has been a better short than a long at $70 for the past six months, and to a degree which exceeds (on an annualized basis) the rate of gains of the past 5 years. For longs, too bad, so sad, but a fact. It is also a fact that this has only recently been the case. Previously it was a much better long than a short at any price, with a rate of gains which tops the market for long term investments. For longs, So great, so fine, also a fact. Two conflicting facts? Hardly. Different time periods. Do I advocate shorting the stock? Hardly. Do I claim daytrading is more profitable than long-term investing in the long term. Never heard that from me. So why bother? The question on the table that investors such as you and I must ponder is which of these time periods is indicative of the future? The returns from our continued infusion of capital into the equity markets depends on the accuracy of this projection. I am not suggesting that an investor should preference speculative trading habits. I am suggesting that in the process of determining where to invest for the long term, one must choose carefully from the universe of instruments to maximize long term potential. Perhaps it is too subtle a concept, but if a stock is a better short than a long, it begs the question the basis for entering a long position in the first place. Perhaps waiting for a dip would be more astute, or perhaps investing elsewhere is warranted. Perhaps more important to an investor who is still infusing capital into the market, it does not appear that CSCO is maintaining its position as a vehicle for long-term hyper growth of capital. It does appear as though market enthusiasm for price appreciation in this stock has waned considerably. Not collapsed, just not bursting continuously upwards any more. I am not so optimistic that price appreciation will keep pace with earnings & revenue growth. So perhaps it's time to scout out the CSCO of the future - you know, that stock which will have grown in value 1500% five years from now. Will it be CSCO? Me personally, I doubt it. Will CSCO be around and be a great, big, solid company with strong market share in an important industry? Yes. But the same applies to GM or IBM or T and we don't look to them for growth. Signs are that a shift has occured. I'd love the opposite to be true. I'm a long way from retirement (pun intended), with heavy bets in the internet/technology sector. Who would want this party to end? John.