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

To: MythMan who wrote (17015)	9/15/1998 1:29:00 AM
From: Jacob Snyder	Read Replies (3) \| Respond to of 77397

So, is CSCO going to tank? I've got a triple in this stock in less than two years. For almost the entire time I've owned it, I've been worried it was overvalued. So far, I've managed to make the right decision, and keep myself from selling it. Is this still the right decision? Reasons to sell: 1. PE at the top end of historical range 2. PE way above expected EPS growth rate. (I use trailing=real EPS, not the fashionable imaginary numbers in forward EPS) 3. market risk. Even with no inflation, and the recent 15% pullback, the market has not priced in the declining earnings most companies are going to see through 1999. There are a number of possible disasters looming up, like Malaysia:Japan::Brazil:USA, and politically unacceptable trade deficits => protectionism => sharply contracting world trade, and debt defaults in [enter any emerging country here] causing bank failures in [enter any rich country here]. 4. Total absence of political leadership in leading countries (liar in USA, drunk in Russia, place-holder in Japan) ensures economic problems will not be dealt with. Reasons to hold: 1. I don't want to pay the taxes 2. CSCO is not a volatile stock, so if I'm wrong, I may not get a chance to buy it back at a reasonable PE for years. 3. no company risk: it will continue to dominate it's old sector, and it's new sector is getting a lot bigger. Having crushed the likes of BAY, CSCO will be bigger than LU in 5 to 7 years. 4. no sector risk: if companies are going to buy anything at all, it'll be networking equipment. CSCO is the real internet play, not Yahoo or Amazon. 5. proven management 6. pristine balance sheet 7. consistent earnings growth Or maybe I should hold my CSCO, and hedge with LU puts? This worked nicely for me, recently, when I held my INTC and hedged with AMAT puts.