Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Lizzie Tudor who wrote (65593)	6/22/2004 12:34:05 PM
From: GVTucker	Read Replies (1) \| Respond to of 77400

Lizzie, RE: Our markets should be rallying, valuations are not that high, the recovery is here (at least intel keeps saying so) and there is no reaction* from the markets.* I would take issue with your contention that "valuations are not that high". Yes, they're not that high compared with '99, but Nasdaq valuations are still extremely high when compared with most periods. CSCO is trading in excess of 31x forward earnings. Even if you use analysts' estimates of 5 yr forward growth (which are almost always too optimistic), the growth rate of earnings will be 16%. A valuation almost 2x the growth rate doesn't leave much room for expansion unless the economy strengthens from current levels.