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

To: dougjn who wrote (14678)	6/22/1998 8:36:00 PM
From: Lynn	Read Replies (1) \| Respond to of 77400

Doug, since you are long on CSCO and, like everyone else who has held these share a few years, have seen your initial investment sky rocket, I have one question for you to ask yourself before you sell any of your shares with the intent of buying back in later: Just how low does CSCO hypothetically have to drop before I can buy back in [getting the same number of shares sold]? Even with the 20% capital gain tax, CSCO probably has to drop further than you realize before you can buy back in without coming out flat. Also, depending on where you live, take the State tax due on your gain into account. Where I live, if I get a $10,000 gain before tax, after tax I'm down to $7,450. I'm a long termer, too, Doug, and I'll ride the fluctuations rather than gamble on a possible pull-back that with my luck probably won't come. Regards, Lynn

To: dougjn who wrote (14678)	6/22/1998 9:12:00 PM
From: Boplicity	Read Replies (1) \| Respond to of 77400

dougin, Why fret my fellow investor? If you think you have a better place to put your funds do so, but CSCO has not corrected with the rest of the market and the high tech. market switching from a PC centric to a data/voice/internet one, my bet is going to stay on, one of, if not "THE" leader of that market. Right now I can think of a better stock with as much investor mindshare, with as much growth ahead itself then CSCO. Greg

To: dougjn who wrote (14678)	6/24/1998 4:42:00 AM
From: The ChrisMeister	Respond to of 77400

"I love Csco, am long it, and have made tons of money in it. I'm wondering, though, if it may not be getting to be time to lighten up a bit for a while. After all, its trading at better than 40x 12month forward earnings. How much further can it go before earnings catch up a bit??" Doug, I've been having the same nagging, am-I-getting-too-greedy? kind of thoughts lately. To counter them I keep telling myself that a 90 trailing P/E isn't ridiculous after all in a market favoring big-cap stocks, anything related to the I-Net, anything going up, and at the end of a quarter which has been rough for many, many tech stocks. Stick with a winner until the fundamentals really change and this is confirmed by market action. With that said, and since I'm into TA, I'm looking at my relative strength indicator (a 14-day RSI) and noting that we're way into overbought territory -- the highest we've been in over 15 months, in fact. This typically means yet higher prices ahead, with no guarantee. Also no guarantee that we don't first pull back before going higher, like the 10% pull-back (from the then new high of 81 1/2 to about 73) following the last time we were overbought. Instead of selling -- and taking the tax hit that everyone's advised you about -- I've been looking at buying put options. This is effectively a cheap way of going neutral or slightly short a stock. Great in theory (the options' increase in value offsets the drop in the stock's value if the latter goes down), but I've had a lousy record trying to make money with options (usually calls) in general. The market has a way of defeating what seem like rational strategies. But I'm still tempted to try it here, especially if we get up closer to 90, as my gut feeling is we'll see a pullback to something like 80 or 82 before we see 95. Just a guess, though. So I'm looking at July 90 or 95 puts. I know another strategy is selling calls (technically these would be covered calls), hoping they'll expire worthless so you keep the income. But if the bull's insane exuberance continues to run, you can get your shares yanked out of your hands and get to pay the taxman. If you're lucky, you only have to buy back the calls at a higher price. So that doesn't seem the way to go, IMO. Sorry, to get off the general interest of the thread and kind of think out loud... I now return you to your regularly scheduled conversations. Good luck, ChrisMeister