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

To: Bob Davis who wrote (23210)	3/1/1999 6:37:00 PM
From: LindyBill	Read Replies (2) \| Respond to of 77398

Bob, you can do a discounted cash flow analysis on Cisco and Msft until you are blue in the face, but, what PE are you going to multiply this by? All of these programs depend upon underlying premises, and, if we disagree on these premises, we will always come out with a different valuation. Every Major Gorilla in the History of the stock market has been considered "overvalued" during its rise, by people using methods like yours. People who use your methods do well, from what I can tell. They just don't end up making money on the "high Flyers". Nothing wrong with that, but you lose the big movers along the way, IMO.

To: Bob Davis who wrote (23210)	3/1/1999 8:17:00 PM
From: The Phoenix	Read Replies (1) \| Respond to of 77398

Historical revenue stream or projected? Projected relative to what other revenue streams? Earnings versus what other relative rates of return? Point is like this.... If the best rate of return is with company A then why invest in Company B, C, D, E, F, or G? If everyone knows that the best return is with company A - they all invest and thus the value of that company is rewarded with what appears to be an overweighted valuation. BUT, the fact is, Company A not only has better earnings but has a better chance of maintaining that earnings growth due to their positioning the market. Fundamentally, valuation is based upon future earnings POTENTIAL and PERCEPTION that those earnings can be maintained and the RISK involved with taking that chance. Cisco has excellent potential, the perception is that they have great potential, and the risk (relative to other equity investments) is relatively low. OG