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

To: RetiredNow who wrote (61260)	9/12/2002 9:47:21 AM
From: Stock Farmer	Read Replies (1) \| Respond to of 77397

mindmeld, you wrote: So as long as there is weak growth the market will move upwards over the long term. The same line of reasoning led to the bubble. The market is currently priced for strong growth. So if there is only weak growth then the market must go down to a fair point from which to move upwards weakly. Alternatively the market can remain flat for however long it takes for weak growth to equalize values. At historically low levels of inflation... well, it could be a historically long time before we get there. In Cisco's case, looks to me we're in for a combination of the two. Equating growth in the economy with growth in stock prices is exactly the gibberish that led to the bubble. People forgot that they aren't paying for today's profits, they are paying for a future stream of profits, in which growth is assumed. So when the accounted for growth materializes the price should not go up. Only when growth happens in excess of what is predicted in the price should the price go up. But instead, every time revenues rose, people jacked up prices and then extrapolated growth from the current price level to justify the current price and then forgot they'd done that and so on... John