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

To: MMW who wrote (23744)	3/19/1999 1:27:00 AM
From: James A. Shankland	Respond to of 77397

Mike, you make several interesting points. Yes, forward P/E is a more significant figure than trailing P/E -- except that the former is, of necessity, a projection. We should all be a little nervous when a reasonable P/E is arrived at based on projections of rapidly increasing profits. A very good company in this situation can take a relatively minor stumble, and have its stock price drop disproportionately, as the market revises its notion of a "fair" P/E downward. And I agree that the market as a whole is overvalued, with CSCO being far from the most overvalued. (AMZN comes to mind, since they've never had a penny of P on which to base a P/E. Granted, they're building up a heck of a franchise; but they're hardly a struggling startup any more, so I would ordinarily expect them to be generating at least some token profits at this point.) CSCO is a great company, and a great core holding for a stock portfolio. But I think there's a real chance it could drop 50% from where it is today, based on changing market and/or macroeconomic conditions. Of course, that might not happen. But anyone who claims it can't happen is kidding himself. It's a mistake to be too risk-averse, but it is also important not to be in denial about risks you're taking.

To: MMW who wrote (23744)	3/21/1999 12:09:00 PM
From: MileHigh	Read Replies (2) \| Respond to of 77397

OTOT Mike, RE your post and RMBS forward look PE, if you believe the RMBS story and analysts earnings estimates, then RMBS is trading at 70X next years earnings with an estimated annual EPS growth rate of 100%+. Some would say, it is a buy here if you have a 1 yr+ time horizon. Actually RMBS EPS estimates for '01/'02 are as high as $6.00, current TTM EPS are $0.32, this growth rate EASILY exceeds the current forward looking PE of 70. Regards, MileHigh