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

To: James A. Shankland who wrote (25486)	5/12/1999 3:14:00 AM
From: Uncle Frank	Respond to of 77400

A thought provoking post, James; you have adopted a very moderate position, which is always wise. But imho your concern about valuations returning to historical p/e ratio levels doesn't seem to be warranted in the face of a liquidity driven market and the demographic megatrends. The huge cash inflow will peter out eventually, but I don't think this will occur by the end of Y2K. Today's report and the upcoming split should attract the MoMo crowd and I'm hoping for a price >75 immediately following the split. You should have ample opportunity to take some fine profits. Frank

To: James A. Shankland who wrote (25486)	5/12/1999 5:41:00 AM
From: Arik T.G.	Read Replies (1) \| Respond to of 77400

James, That's one of the best posts I read lately, and I also liked Uncle Frank's response to it. I have one other factor that should diminish growth expectations and that's the market growth. CSCO showed only 25% sales growth in the US from 1997 to 1998. The sales growth in Europe was tremendous (475%)and changed the overall picture, but that kind of growth is not sustainable, and IMO sales growth would eventually decline to 25% overall. Under such conditions a P/E of 40 is fair enough, which will translate next year to a pre-split price of $80-$85. So MO-MO aside, the current price is therefore 80%-100% overvalued IMHO. ATG

To: James A. Shankland who wrote (25486)	5/12/1999 10:03:00 AM
From: The Phoenix	Respond to of 77400

James, I agree CSCO is a little ahead of itself and I agree that the current price is about right. BUT, you siad the earnings report is "priced in". These are two different positions. I don't think the report was priced in and the unexpected 2:1 wasn't priced in. That's why the uptick this morning. If it gets too much beyond this point then it becomes emotion driven but I certainly think a good report is worthy of a 5% gain....notwithstanding that the underlying security is already ahead of itself. TO say that the earnings report is priced in is to say that the report wasn't a surprise.... it was. 44% revenue growth 26-27% earnings growth, 2:1 split signalling confidence in future growth, revenues in excess of $3B...all upside surprises... OG