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

To: t2 who wrote (43715)	11/22/2000 6:06:02 PM
From: larry	Read Replies (2) \| Respond to of 77400

T2, You are really looking at this situation through bright glass. If the mess is resolved, we will probably rally for 10-15% from lows and then a gradual downturn to test the lows again (unless we get a fed rate cut which I don't believe that it will happen). I am patiently waiting for a sharp reversal in Nasdaq but much to my disappointment, I have not seen it. We are seeing a dramtic drop followed by an ordered retreat in nearly every tech sector which is the trait of a typical bear market. We need to have a catalyst to bring us out of the funk. The resolution of the mess will only pop up the market for 2-3 days. After that, it's business as usual. The bottomline is that the bulls (including myself) have pushed the game so far that lots of issues still look overvalued after a 50% haircut. I still remember that in Oct. 1996, when DELL, the highest of all high flyers, were trading at TRAILING PE of 30 the day we lost 6% in NASDAQ. And lots of people were arguing that DELL was way overvalued. DELL was growing top and bottom line number by 70-80% year over year at that time! Today DELL is trading at trailing PE of 33 with earning growth in the teens. Not to mention that it missed numbers 4 out of 5 recent quarters. So where do you see the valuation? CSCO, excluding all investment gains and other technical writeoffs, still trades at trailing PE of 125. And now tell me what is the historical PE of CSCO? My point is, although CSCO is a great company, and at 40% from its high, the issue is still very expensive. Any false step can result in a 20-30% haircut in one day. And the upside pontential is limited, unless we go back to the YHOO! days when people purely trade on momentum. I kind of like the fact that the bear market run has killed a majority of the momentum players. Finally, we might have a normal market that trades on fundamentals. BTW, if no rate cut in the next 6 months, I am expecting Nasdaq to form a true bottom at 2200. We will get a fake bottom at 2600 in the near future but it won't last. It will take years for NASDAQ to reach new highs. Nikkei is still down 60% from its high after 10 years. We will pay dearly for stretching the valuations to extremes. As for Abby COhen, she was the hero of the 1990s. She should learn to shut up right now otherwise her reputation that she built in the last 10 years will be gone within the next 12 months. larry!