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.

Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Pancho Villa who wrote (9387)	5/31/1998 3:25:00 AM
From: Dale Baker	Read Replies (3) \| Respond to of 18691

CSCO has a projected growth rate of about 25%, yet it trades at 42x FY1998 earnings and 34x FY1999 earnings. Though I suspect you would need an institutional move out of tech stocks for it to feel the pain that it went through in early 1997. The 200DMA sits around 50. That would be the target if CSCO warns about Asia woes in their next earnings report. Sooner or later, the analysts will have to admit that second-half 1998 tech profits are not going to be rosier than the first. Where will the bounce come from? Only their upgrades, from what I can see.

To: Pancho Villa who wrote (9387)	5/31/1998 4:10:00 AM
From: Dale Baker	Read Replies (2) \| Respond to of 18691

A warning shot for DELL (and maybe MSFT) if NC's catch on like this: abcnews.com and abcnews.com. Note the quote in the second article that, "According to International Data Corporation, sub-$1,000 systems will account for 35 percent of U.S. consumer desktop shipments in 1998." Anybody want to crunch the numbers for DELL, GTW and CPQ?

To: Pancho Villa who wrote (9387)	5/31/1998 6:04:00 AM
From: Dale Baker	Read Replies (1) \| Respond to of 18691

Pancho, what do you think about the explosion in bank lending to buy securities discussed at the end of this article? interactive.wsj.com

To: Pancho Villa who wrote (9387)	5/31/1998 10:05:00 PM
From: Investor-ex!	Read Replies (1) \| Respond to of 18691

Pancho, Thanks for posting that 10Q excerpt. I agree with your CSCO assessment. A good company, but CSCO may be in for some rough times ahead. Apart from Asian exposure, whenever I consider CSCO, the very likely increasing impact of Y2k remediation on corporate I/T expenditures immediately comes to mind. If I/T budgets are ballooning to fix this mess, and there is some very good early evidence that they are, I can't see how CSCO can materially participate in Y2k spending. Quite the contrary, I see CSCO's router markets stalling or even contracting as more and more dollars and personnel are redirected toward Y2k repairs. Well, sure enough, right in the middle of the 10Q you posted, management admits as much. If there is a general tech sell-off, CSCO will not escape unscathed.