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

To: Byron Xiao who wrote (21983)	2/4/1999 3:53:00 PM
From: jach	Read Replies (3) \| Respond to of 77397

If CSCO gets IBM type of PE it will be trading at 42$. And why not, CSCO is no comparison (not even come close at all) to IBM at all. Why should CSCO be at close to 100 PE where IBM is at 30 PE.?

To: Byron Xiao who wrote (21983)	2/4/1999 4:25:00 PM
From: James A. Shankland	Respond to of 77397

What do you think it's a bargain price to buy CSCO? What do you think it's a good entry point in the current market climate? Oh, gee, now you're putting me on the spot. Personally, I think buying in last October at 41 is a very clever thing to do :-). I guess I'd start looking at buying some around 90, and would pick up more around 80, still more if it dropped further .... If you figure it deserves a 50 or so P/E based on this past quarter's earnings, that might put fair value around 72 (.36 * 4 * 50). One can argue that CSCO deserves a higher P/E, as it's a terrific company, but 50 is pretty high, befitting a terrific company. If you allow a P/E of 60, fair value is about 86. Tim Luke and others will, I think, argue that CSCO will see 150 before it sees 90; and they might be right. Certainly, for many high-tech stocks, P/E has not been particularly useful as a predictor of actual stock price movements lately. In the end, we're all taking our best guesses, and you will have to listen to all the arguments and make your own decisions.