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To: Prognosticator who wrote (42090)	3/15/2001 9:36:54 PM
From: Stock Farmer	Respond to of 64865

Observations & Answers in reverse order. Answer: Impact of fundamental interest rates shows up in discount rate "r" in the formula. This is generally the risk free rate of return (you are calculating a net present value). Observation: Don't dismiss PE too quickly. Just recognize its flaws and utility. Flaws are that it is imprecise and lacking character as a quantitative comparator between equities. Utility is that if you have to use outlandish assumptions for the linear factors to justify current PE, something has to give and it won't be the outlandishness of the assumptions! So it is VERY useful to say "If this PE is fair, and all things are equal, then we must assume Revenue in 10 years will be X" and see what consequences fall out. If foolishness falls out... well, maybe twister's got a point? John.

To: Prognosticator who wrote (42090)	3/15/2001 9:50:30 PM
From: Stock Farmer	Read Replies (1) \| Respond to of 64865

OT - as to your CSCO entry point, I suggest waiting. FA & TA are aligned in downward momentum for CSCO right now. If 18+ holds against a serious test, then I expect huge overhang resistance all the way up to 35... so you can always catch some of the gain back. But if it fails, you could get cut down close to single digits. Sounds crazy, but remember how crazy NAZ <2000 sounded back a year ago? Market is too turbulent for me right now. I guess I'm some of that "cash on the sidelines". Making my money the old fashioned way these days. John.