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

To: Stock Farmer who wrote (53356)	5/23/2001 1:38:02 PM
From: Charles Tutt	Read Replies (1) \| Respond to of 77400

If the government were to pay off the bulk of the national debt, and thereby drive Treasuries below 1%, a PE of 40 would look like a gift. JMHO. Charles Tutt (TM)

To: Stock Farmer who wrote (53356)	5/23/2001 6:53:40 PM
From: RetiredNow	Read Replies (1) \| Respond to of 77400

I have articulated why I think Cisco will retain its high PE. It's because they are the best in their market segments, so the market affords them a premium. In addition, you have a company that will grow as fast or faster than their industry, so they get a premium for that too. Then you also get a company that has been consistent as hell for 10 years until the last two quarters. Starting this quarter, you'll see again that they are consistent going forward, as they have been in the past. The market awards consistent companies with higher PEs as well. Then of course, if Cisco's markets start growing at the 30-50% clip again, so will Cisco. So the market will give Cisco a PE of their growth rate plus a premium for all of the other reasons I gave. So can you articulate why you think the PE should be lower than 40-50 in the next 5 years? Up until these last two quarters, Cisco consistently delivered net margins of around 20% before one time charges. They will continue to do that in the future. And let's not start the argument on proforma vs GAAP net income, because nobody on Wall Street gives a shit about GAAP, so neither should you at this point in time. So can you articulate why you think they will not be able to reign in costs and change their product mix to get gross margins back up? I have repeatedly posted market studies showing the expected growth of the market segments that Cisco participates in. That is proof enough of where the money will come from. All you keep giving us is blabber about how no money will roll in, but have you given us proof in the form of documented research that says the Cisco's markets will not grow? No you haven't. If you think IT spending will decrease from here on out, you have alot to learn. We are in the Information Age. That means by definition that IT spending will continue to take a great share of ALL capital expenditures. Do I think more will be spent on IT goods and services in 2005 than in the peak of 1999-2000? Hell yes and I'd be will to bet you the mother of all SI posting bragging rights on that one. And do I think that Cisco will continue to get more than their fair share of this IT budget? Hell yes again, as long as they have their winning management team in place. Will I see you 5 years from now, so that I can claim my bragging rights when I turn out to be right? Well, that's up to you. I'll be here unless something fundamental shifts within the company, WHICH HAS NOT HAPPENED YET (you'll want to debate that too, I'm sure). But I doubt you will be around here to kowtow before me. Because I am a long term investor who's been here 4 years and will likely be here another 5, but you have no long position here, except maybe long in the face wondering if you've missed the mother of all buying opportunities.