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

To: RetiredNow who wrote (52579)	5/9/2001 1:07:57 AM
From: Stock Farmer	Read Replies (2) \| Respond to of 77397

Mindmeld: Caution. There is a difference between CSCO going out of business and its stock being overpriced. If CSCO had one share, perhaps we would willingly pay $100,000,000 for it? If it had 750 Billion shares, would you be saying $20 was a fair price? The point is that the price of the slice is high relative to $0.03 "pro forma" quarterly earnings per share. Not that the gains to the company are small. The internet is phenomenal. But it's foolish to think it will only accrue to Cisco. It is insane to forget that every dollar Cisco earns must be divided by 7.5 Billion shares to become a return for CSCO shareholders. You toss around a PE of 48 for a company with forecast revenue growth net negative 10% for as long as the company executives are willing to give guidance, and hypothetical potential revenue growth (if everything goes right) of 30%? Good for you. I imagine an entire industry growing up around the Internet. The same Cisco commercial you typed out. Billions and Billions of earnings... all of the same promise as you do. Where we disagree is the degree to which it will be attracted to one company, and then further subdivided amongst the billions of owners of that one company. Very similar discussion about RCA and the future of radio back in the 20's. And all true. The mistake was assuming all of the benefit would accrue to RCA. Nobody had heard of QCOM back then, for example. John.