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.

Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Rande Is who wrote (35243)	9/18/2000 11:59:31 AM
From: Jennifer O	Read Replies (1) \| Respond to of 57584

Rande<<But I disagree that buying CSCO at 300+ times earnings at the beginning of 2000 should be considered a "Blue Chip" investment. At the current rapid rate of growth, it will take 300 years to grow into that valuation. Now that it has been chopped down, the PE is 172. . . thats 172 years worth of earnings to equal current valuation>>, Are U predicting CSCO is gonna to grow 0% per year now? Otherwise if I assume 40% growth, I have CSCO at 15.3years to grow into it's valuation. Am I doing something wrong.......or it is your math wrong?///

To: Rande Is who wrote (35243)	9/18/2000 12:17:25 PM
From: George Burdell	Read Replies (1) \| Respond to of 57584

Maybe I'm dense. Probably so. Your closing asked the question on whether the concept of blue chips was dead, and opened that to discussion. That's what I've been speaking to. Blue chips have not been immune to haircuts in the past - look at T in 90 and 96, IBM in 92, etc. But if 'Ma' had held those instead of Sears, she would never have never known, because she won't sell anything for another couple of years. For a long enough hold, there IS safety from volatility. Volatility is implicitly short term. We agree completely on CSCO. I was using it as an example of a non-blue-chip that would be entirely inappropriate for 'Ma'. Even 40% growth at 13.5 years to get back to a todays price, or whatever whativer was arguing, doesn't make it any more realistic. I agree with you that markets are changing, and manipulation is becoming more brazen. I think early 2000 saw this intensify, with the Y2K money supply yo-yo as the catalyst. Do I think this kills the concept of 'blue chip'? No. Good long term earnings prospects, with dividends to provide cash without selling, will continue to be blue chip investments. Volatility is moot. The dow's going to 110,000 by 2025, right? <G> GB