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

To: Yaacov who wrote (49760)	3/10/2001 2:19:07 PM
From: Tom D	Respond to of 77397

You think CSCO will find a bottom and then deliver a respectable return. The argument to consider is that perhaps CSCO has been "found out". Its apparent profitability is not of good quality, and the true growth rate in earnings is minimal. What do earnings look like if you take away the impact of employee stock options and the pooling method of accounting? Employee stock options as a means of compensation won't work if employees have shattered confidence about future appreciation of share price. The pooling method of accounting will continue, but for my investments, I want to buy real earnings growth, not accounting fluff. I think the true present value of CSCO is less than $5 per share. I think there is substantial risk that the market value will get under $10. In addition there is risk that we will go into a recession, mostly because of the climate of panic. I see no near term positive catalyst here. To the contrary, we are entering a period in which investors may have to sell equities to pay their April 15 tax bills. I will consider moving some money into tech stocks after then. Until that time, I will continue with my current strategy: 30% in bonds, 40% in a value manager, and the rest overseas and in small cap. Tom D