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

To: chaz who wrote (62678)	1/14/2003 10:02:23 AM
From: M. Charles Swope	Read Replies (2) \| Respond to of 77400

I think Chaz is right. A strong Dell challenge probably isn't a threat to CSCO's survivability or even its position as the market leader. It is a threat to its margins though.

To: chaz who wrote (62678)	1/14/2003 6:06:08 PM
From: Jacob Snyder	Read Replies (2) \| Respond to of 77400

Cisco buy/sell plan: First, I think your concern (on the Dell/Cisco question) is the right question to be asking, and the place to focus attention. Over the last couple of years, I've reevaluated my previous opinion, that Dell had no LT sustainable competitive advantage. I still can't see any good theoretical reasons for Dell being able to do what it has done. I keep on expecting someone else to be able to copy Dell's methods, but nobody seems able to. So maybe it's sustainable. I, too, don't have the ability (and don't have the hubris to imagine I do have the ability) to know whether Cisco's products are commodity-candidates. I'll let the market tell me; I hope I'm smart enough to listen to what the market is telling me. Second, I think Cisco at a stock price over 15 is unsustainable, given current macro conditions and Cisco's business model. So, I think the only way to make money in CSCO, is trading or shorting. BuyAndHold won't work, until: 1. Cisco stops giving the company away to employees, via stock options. 2. the locked-in dilution (from outstanding options) that guarantees a LT ceiling on the stock price, gets reflected in the stock price. 3. A PE of 10-20, based on an E that does not include CreativeAccounting, is reasonable. 4. we've seen (or the stock market anticipates) a sharp slowdown in consumer spending, triggered by falling housing prices. Assuming Cisco earns $0.60 in CY 2003, then 15/.6 = 25. I can't think of any reasonable scenario in which CSCO sustains a PE over 25. Or makes more than $0.60 in 2003, and even that requires a belief in the RosyScenario. As I've previosly posted, I sold all my long position in the 13-15 area, and will think about going long in the 5-10 area, which I expect to get sometime in 2003 or 2004. Right now, I'm looking for an entry into a short position. The volatility of the market over the next few months is probably going to exceed baseline market volatility, because of war worries. TA voodoo: 15 was a triple top stockcharts.com[h,a]dahlnyay[de][pb50!b200!f][vc60]&pref=G in July,August, November 2002. I thought seriously about re-loading my short position here. But I already have a large short position in semi-equips recently initiated, so I think I'll wait (to add to my total short position). The next resistance is the March/May 2002 double top in the 17s. Above that, strong resistance in the low 20s, where every rally died from early 2001 through early 2002. Above that, we're in BubbleLand. I'm considering shorting in increments, every point from 15 to 20. Cover between 10 and 15.