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

To: Amy J who wrote (50879)	4/2/2001 10:15:26 AM
From: Stock Farmer	Read Replies (1) \| Respond to of 77400

Hi Amy - dangerous questions. The following is my reasoning on my portfolio. Not advice. Personally, I am not contemplating buying any tech. Ok, call me stupid but I don't think the damage is finished being done yet. We might see some rallies. In fact, I expect one very soon. I admit, I am consciously planning not to participate. I have removed myself from the table because I see potential for another 30% downside from here. I remain concerned about the clarity of forward estimates for the company. Recall earlier posts I was concerned about the three elements of The Business? Nameley 20% investment banking, 40% internet gear, 40% selling slices of themselves from a "where does the real money come from" perspective. Nobody has shown me any quantitative or qualitative evidence that would shift my position here. Which then leads to the following three concerns. You can do the mixing of the math. Firstly, the 40% part of the business that everyone talks about and is well understood (internet gear) has hit a brick wall. Sure, bricks are crumbling and they will probably go on through... but at what speed, at what cost, and with what consequences? Even Chambers is saying he can't see through the brick dust. Second, the other 40% part of the business that is talked about but not understood has just been hit with a sledgehammer too. The value of outstanding stock options TO THE COMPANY has been reduced by 80% or more in my calculations. It appears to me that this "off the income statement" cash flow has been used to finance growth at rates over and above what operating profits could generate. Third, the investment side is exposed to a deleterious melting. My estimates have the "unrealized gains" that everyone was crowing about to be pretty much unrealizable by now. So I can't see the business, I can't see sustained growth at recent rates, and the war chest that might otherwise sustain them is evaporating. Weighting the risks... they are high. I'd rather buy in when I can see. Even if it means I don't get the bargain of the century. And it is possible that $15 was the lowest price we'll see this year. I hope so... for more than one reason... but I am not betting on my hopes. John.