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

To: Jay Couch who wrote (41764)	10/30/2000 2:01:13 PM
From: Milan Shah	Read Replies (1) \| Respond to of 77400

P.S. I am planning on doing some heavy buying by the end of the week. I can't back up my reasoning with any facts, but I have a feeling there is going to be a very big turnaround next week Me too - can't place it, but I just placed an order to close out my Nov 65 covered calls. I have been giving Bambs' arguments of large numbers some thoughts. The main thesis of the shorts' arguments is that at these levels, CSCO is fairly valued at best to 2010 (or distant future date) based on P/E arguments and the revenues needed to get there. I believe the number quoted was that CSCO would need $350BB of revenues and earnings of some $30BB to justify even its current level. These are undoubtedly large numbers. However, there are other large numbers which can tell a different story. According to the Bureau of Labor & Statistics, the US GDP is expected to reach about $8Trillion by 2006. Currently, roughly 2 to 3% of Corporate budgets are used on IT spending. Even at that level, we get total IT spending of $240BB, just in the US alone. Quadruple that to get global figures (I believe US is still roughly 25% of world economy), that gives you a $1TT of IT spending. IT spending is also expected to increase to about 5% of corporate budgets. This part seems very conservative - if you think about all the B2B exchanges etc. being setup, that should add up to a much larger spike in IT spending in the near term. So, now we are talking $2T of IT spending, on a pretty conservative set of numbers. Can CSCO capture a 20% share of that? Do you think CSCO's strong management will be nimble enough to grab other growing opportunities with their cash hoards? Another way to look at this is like so - there are 4B people in the world today. If you have listened to John Chambers speak, and seen the CSCO ads, the message is very believable and clear that every government must invest in this infrastructure of risk essentially disappearing from the face of the earth. Do you think people will spend $100 a year on bandwidth usage by 2010? That adds up to $400B. True enough, this is not a slam-dunk argument to go long, but the large numbers being bandied by the shorts, while reasonable, are not necessarily cause for concern.

To: Jay Couch who wrote (41764)	10/30/2000 2:11:50 PM
From: bambs	Respond to of 77400

thanks

To: Jay Couch who wrote (41764)	10/30/2000 2:48:22 PM
From: michael97123	Read Replies (1) \| Respond to of 77400

"P.S. I am planning on doing some heavy buying by the end of the week. I can't back up my reasoning with any facts, but I have a feeling there is going to be a very big turnaround next week." I believe you are right. Monday csco, tuesday election, following week amat earnings and greenspan. The ship should get righted imo. As far as bams goes i was just reacting to his attack on gary. I have been on and off this thread for a year and Bams sometimes goes beyond gloating. I too mocked him. He turned out to be right on s/t market direction. I still believe him to be wrong about direction of the economy and thus l/t marktet.