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

To: john dodson who wrote (52157)	4/26/2001 8:08:52 AM
From: Stock Farmer	Respond to of 77400

Why might I buy CSCO below $10 when $4 looks like "economic" value? Because in practice I am ruthlessly pragmatic. I suggest that it is "worth" something in economic terms, and something else to the market. Heck, wasn't CSCO priced at maybe $80 some time ago? Economic conditions haven't changed that much! You will also recall I didn't think it would make it below $15 this year, despite dimmer future prospects. Economic and market values converge over time, but there is a non-zero risk that they will remain apart. There is also a risk that full value is not appreciated and the stock is priced below fair value. Finally, mindmeld and I are using a primitive valuation method that possibly discounts true economic value by as much as 50%. Signs actually point to $8-10 being "fair" value. So when I buy a company I produce an expectation value. A risk weighted expected 5 year return around an aggregate economic value derived from several methods. The grey zone for CSCO is around $10. So I would consider investing if it dips below $10. IMHO, Cisco (the company) is a good company, stock CSCO is pricey. John.