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

To: Ex-INTCfan who wrote (22088)	2/6/1999 11:48:00 AM
From: William F. Wager, Jr.	Read Replies (2) \| Respond to of 77397

Chambers interview in Monday's IBD as follows... Cisco Picks Up Product Pace, R&D Funding Date: 2/8/99 Author: Michele Hostetler It was lucky 13 for Cisco Systems Inc.'s fiscal second quarter. The largest seller of networking gear released 13 products last quarter, a quarterly record and more than it has released in some full years, says Chief Executive John Chambers. The flurry included Gigabit Ethernet products and gear that handles data-voice-video traffic. The effort paid off. The company last week said sales for the quarter ended Jan. 23 rose 40% vs. the year- ago quarter to $2.83 billion. Operating earnings rose 24% to 36 cents a share. With charges, final earnings were 17 cents. The results beat estimates, but shares slipped when Cisco didn't do a stock split, as some analysts expected. Cisco wanted to release a lot of products to boost its third quarter, too. In the past five years, four of its five slowest quarters have been third quarters. Chambers spoke with Investor's Business Daily after Cisco released earnings on Tuesday. IBD: How did you try to ensure that the last quarter would be a success? Chambers: We made a conscious decision . . . to boost R&D from what was 7% to what is now about 13% of our total expenditures. We began to invest in multiple areas of R&D and we also broke ourselves into business units to focus on each product area. And within the business units we have customer focus areas. The products started to spill out pretty rapidly. We started making the (extra R&D) investment almost two years ago and have been slowly bringing it up. IBD: How do you know you're on the right track? Chambers: I spend 50% of my time with customers. They tell you where you are in key product areas. I listen to critical accounts every night, 365 days a year. We pay our managers -every one of us - on customer satisfaction. IBD: What's another trend getting Cisco's attention? Chambers: One that we're right in the middle of is the data-voice-video convergence, beneath the (network) data infrastructure. The first area where (convergence) occurred was the wide-area network. The next major move, if we're right, will be in the local-area network. There's no reason to have a separate network for your voice and your data. Companies probably should not be putting in PBXs (private branch exchanges) or writing them off every three to five years, because they're not going to be of value in those later years. IBD: What's your take on Lucent Technology Inc.'s plan to buy Ascend Communications Inc.? Analysts say Lucent bought Ascend for the technology it got from its purchase of Cascade, to respond to technology you got from your purchase of StrataCom. Chambers: We bought StrataCom for the WAN (wide-area network) and ATM (asynchronous transfer mode) capability. Lucent bought Ascend both for that and the dial capability. The challenge is that Lucent has to fill in a bunch more gaps. Almost all acquisitions and mergers in our industry fail. Cisco's the only one that's been really successful in this. Also, most of the key people with an acquisition are gone within two years. Mory (Ejabat, Ascend's CEO) did a very good job of managing that company, but the top management out of Cascade has been long gone. Now, Mory won't stay retired, because he's really good. I just hope next time he's a partner, not a competitor. IBD: Do you want to offer him a job? Chambers: Oh, he's too rich. But I'd love to lure him as a partner. The point I'm making is the top management is all gone from the original Cascade-Ascend group. Lucent has got some challenges. I would not have had the courage to (buy Ascend). IBD: Cisco's stock has been one of the best performers ever. What do you think of President Clinton's proposal to have the government invest in the stock market to help save Social Security? Chambers: I'm not an expert in this area, and I worry when business leaders express opinions in areas they don't understand as well. I worry about when people come into the market when it's at an all-time historical high and (then) get surprised. Having said that, when you look at the place that's had the best return over the years . . . it's been the stock market. In the long run, that might be a very good decision. But you often worry about the entry point, or the timing. IBD: You've worried about increased government regulation. Do you think this proposal could lead to more such regulation? Chambers: No. But I am very concerned about business and government working together, not just as it affects the Internet. What a lot of people haven't figured out yet is that if business doesn't communicate better to certain government agencies about stock options, accounting for acquisitions, pooling requirements, etc., you could suddenly slow down or stop the growth in the industry. You also put small businesses in the position where they never will have the chance to compete with the big players. I think the consumer loses out. You lock in who's going to win, with very few exceptions. It's almost impossible for anybody to take on Microsoft unless they can do acquisitions, pool interests and offer stock options. Sometimes in the effort to address the abuses of a few, we impose restrictions on the majority. (C) Copyright 1999 Investors Business Daily, Inc.

To: Ex-INTCfan who wrote (22088)	2/6/1999 12:21:00 PM
From: Dennis Eckert	Respond to of 77397

The $64K question! If it were me, I'd divide the timing into two periods next week: before Tuesday's high-tech conference (where it looks like analysts will hear from a number of high-tech CEOs, and if they like what they hear they will issue re-assuring comments that would help increase prices). Or, after results from the Tuesday conference. Before Tuesday's conference results get out, I'm suspecting we will see a bit more price erosion, primarily cause Friday's closing action was negative. (It's my viewpoint that the last hour of trading is more dominated by professional traders than the amateurs as the pros tend to take the opposite side of the amateurs or retail investors.) If Monday's first 30-60-minute action is also negative and then Tuesday's opening is also negative, you might find a good entry point sometime Tuesday. This is because I can't imagine the CEO's saying anything at the high-tech conference that wouldn't be interpreted as bullish. (Just my opinion -- strong openings seem to be dominated by retail investors cause they come home the previous night, look at the market, like the action on a stock and place overnight orders to buy 'at market', and up the price goes. Then about 30-35 minutes after opening, the pros burst in with opposite actions -- look at intra-day charts on CSCO and notice price action within the first hour and within the last hour). As for price support level, my OmniTrader program shows short-term support at $92. Because it looks like you use 50 and 200-day moving averages, you might want to look at one of my favorite on-line charting sites: tscn.com It's from TeleScan, the data provider I use. You can choose various indicators on the CSCO chart, and see which one or ones gives various rates of return. For example, the 50-day exponential moving average for the last 6 months of CSCO shows a return of 65% in 4 trades if only the 50-day was used to enter and exit trades.

To: Ex-INTCfan who wrote (22088)	2/6/1999 1:01:00 PM
From: Claude	Read Replies (2) \| Respond to of 77397

A lot of people think 90 is easily reached but look at how many are ready to load up at that range. Look at the support the stock had yesterday. Every time it breaks 100 buyers come in. I'm still of the opinion that the trees are being shaken here and the weak hands are being kicked out. With all of the economic numbers I've been seeing there's no way we're going much lower than this. I think the best buying opp has already passed. my .02 Claude (rhymes with TOAD)