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

To: The Phoenix who wrote (15535)	8/1/1998 6:57:00 PM
From: LLCoolG	Respond to of 77400

Gary, I appreciate your posts to the Trial Member. Perhaps you could also suggest that investing is a Zero Sum Game. Anyone who acts as Puff Daddy suggests will certainly be adding to my portfolio's value. While CSCO's price to earnings valuation has indeed gotten high, or very high, you must understand that this company is basically a money market stock, and will probably be capable of maintaining a PE of 1.5 to 2 times the growth rate for some time. Everybody wants to be in stocks today. Think about it. Wall Street reports have become much more prevalent on national radio and TV news programs. CNBC's ratings have exploded. Bloomberg has a TV network now. Lots more people are talking about stocks and investing. And more are acting. The talk about the new paradigm shift to a "Nifty Fifty" scenario lately. And this is where many people blindly throw their money. It is the reason that KO and G maintain PE's way over the growth rate. It is why the drug stocks, as a whole, have PE's well over 20-25. It is why MSFT and CSCO have historically had high valuations. It won't stop unless a prolonged or dramatic shift in the companies, or their market niches, occur, such as the disadvantage Barnes & Noble now has against Amazon if they cannot compete on the Internet with them. Who will travel to the store when they can order at home? These big stocks are similar to money markets. And while spiked valuations, like CSCO's at present, may lend credence to more frequent trading to avoid 10-15% drops, as CSCO did last October and November 3 times, long term these stocks are superb. And CSCO may in fact be the best, based on the market reasons you list. Thanks, G