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

To: PMS Witch who wrote (42373)	11/6/2000 1:13:09 PM
From: GVTucker	Respond to of 77398

PMS Witch, RE: One has to wonder if human nature has more influence than business fundamentals on CSCO share prices. I don't have to wonder about that. I am confident that you're right. That is the case for just about any high PE stock. The reason why is that with a stock like CSCO, you're dependent on revenues far out to justify the current stock price. A whole lot of factors taht are mere guesses right now can effect what kind of rate revenues might grow over the long term, or the riskiness of those revenues. And when you're talking about discounting back a stream of cash flow ten years from now (and for CSCO, you really need to look that far out) a small change in the rate can cause a big change in the price that is currently justified. The market thus has to look at a lot more nebulous-type of issues; the market has to look at these kind of issues. It appears that fear spreads much faster and further than optimism or confidence. I'd disagree there. It just seems like that because the market is in a 'fear' stage right now. A few short months ago, the market was in a 'greed' stage, and confidence spread much faster than fear then. That stuff will cycle around, and if you're a longer term investor, is pretty much irrelevant anyway, as you appear to realize.