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

To: kvkkc1 who wrote (41493)	10/25/2000 7:50:49 PM
From: bambs	Read Replies (1) \| Respond to of 77400

I see you don't understand what value is. Here's simple example for you. I will put things in dummy terms for you so you can understand what is going on. Let's say this was the being of the restaurant boom instead of the internet. People start going to a few restaurants and they have high margins and make piles of money. So, says the restaurant business is the future. So people go out and borrow piles of money and open big and better restaurants. The public invests piles of money in these businesses stock. They make big paper profits. They go out to restaurants and spend piles of money on credit card. The restaurants all go up. Then finally debt levels hit a high. The public starts selling a little stock to pay debt. The stocks stop going up because the public stops buying on margin. Competition increases in the industry. Margins decline. Corporate debt starts digging into earnings. Some restaurants bought others to form a change. They over paid for there purchases but used their own stock. They then try to squeeze competition out of business by lowering prices. Some even start selling things at cost to try to keep revenue growing and keep investors happy. Some restaurants go out of business. They default on their loans. The lending companies lose money and their stocks get hit. The stocks all start to crash. The public loses their huge of paper profits. They go to restaurant less because they can't afford it. In the end we are left with piles of great restaurants. Not good investments though. The survivers have margins like MOT 6%. The valuations don't make sense but the public thinks that things are cheap because they are down 40% but still up 1000% over two years. The market slowly bleeds as insiders and investors with low average costs take profits all the way down. The average Joe is confused and poorer then when he started. The Internet is great. The internet will go on. High speed Internet will happen. Wireless solutions are great. Ecomerce is the future. The problem is debt levels. Growth rates and stock valuations. VALUE! You don't understand VALUE. Bambs