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

To: RetiredNow who wrote (22025)	2/4/1999 9:34:00 PM
From: JC Reddy	Respond to of 77397

Thanks mindmeld. I completely agree with you about CSCO helping you retire early if you hold on to this stock for the next 10+ years. No doubt about it. Hell, 25% appreciation for 10 years would make your money 10 times. If you have enough to invest now, you can retire after 10 years with CSCO. I do think CSCO has the ability to grow at 25% for at least next 5 years... but the stock is so overvalued, I doubt if it is going to do that without some major correction down the road. But, if you are long term holder, nothing to worry, IMO. Good luck to you too.

To: RetiredNow who wrote (22025)	2/4/1999 10:36:00 PM
From: jach	Read Replies (2) \| Respond to of 77397

<insane valuations cool a little> exactly! from insane PE of about 100 to the reality of the growth rate of 40. So, the cooling price is (1.40x40) = 56$. So, 70$ is actually still a little pricey.

To: RetiredNow who wrote (22025)	2/5/1999 1:40:00 AM
From: John Stichnoth	Respond to of 77397

A few weeks ago I worked up a spreadsheet to see how crazy these multiples might be. Seeing the discussion here, I have uploaded the table to: bergen-nj.com The table has two parts. The first is a base for comparison. What happens if we invest in money market funds? The second part asks what happens if the "crazy" PE suddenly were to fall to current market levels, but we see continued superior earnings growth? How long would it take the investor to do as well as the money market rate? The answers are that at first (of course) you lose lots of value. Then, your investment starts to rise with the growth in the company's earnings. (I assumed 30% annually). It takes 7 or 8 years to finally match money market returns. Thereafter, the high growth of the company's earnings gives you great returns. As an investor, therefore, the question today is whether you believe that we will see the superior earnings growth for the period needed. (With Cisco, that seems a much more reasonable assumption than say Yahoo.) js