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

To: RetiredNow who wrote (66686)	12/1/2004 11:54:40 PM
From: Elroy	Respond to of 77400

I say it is inevitable and you say that the last 10 years proved that Cisco's margins will stay this high for a long time to come, notwithstanding the new competition from China. I didn't say what you said I said, and your point (that the margins will eventually come down) isn't very useful without a timeframe. What I've said is that Chinese competition is NOT going to be the spark that causes price erosion, that's all. Citibank is not going to buy Huawei ethernet switches to save 20% on each switch, its just not going to happen. As for the view that CSCO's margins will eventually come down, of course, eventually. What can we do with that piece of information (at least from an investment perspective)? In order to use it, you need a timeframe of when the margin erosion will be about to appear and get reflected in the share price - without a timeframe, one may end up shorting CSCO today for an event that may occur in 2012. Anyway, I think CSCO's bigger problem is determining their overall growth rate. Most of big tech has done well in 2004, H1 and H2, and somehow each of CSCO's quarterly reports has been a disappointment to expectations (although the actual growth has been robust, above 20%, but with easy compares). I get the impression that networking (as an entire industry, not pockets of networking) may not be growing in double digits, which doesn't make for a very exciting tech stock.