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

To: W D J Moore who wrote (25502)	5/12/1999 12:38:00 PM
From: Steve Lee	Respond to of 77399

Mr Fun will talk down CSCO as saying CSCO made their # by having an extra week to close the quarter. I suspect he's/was working for LU or at least very closely related. But I like his technical analysis any way. Hey Mr Fun, don't be shy of making your comments about CSCO's Q. Best Regards SL

To: W D J Moore who wrote (25502)	5/12/1999 1:13:00 PM
From: Mr.Fun	Read Replies (4) \| Respond to of 77399

Greetings from N+I in beautiful Las Vegas. It's been obvious for a month or so that CSCO would beat this Q. Revenues were a hair higher than I expected, but was surprised to see expenses up 120bp. All in all, given the extra week in the Q, growth was only OK, but I believe management defered a lot of business it could have closed in the quarter until July. The biggest driver of the stock this morning was the tone of the CC. Management was pounding the table, meaning July is in the bag too. I read a few things into this: 1) enterprise is hanging stronger than I expected - access routers (3600, 2600) are on fire, gigabit/layer3 product lines taking alot of share. Management did put out a big fat warning about Q2 2000 (Jan), saying (I paraphrase) "We'll focus on delivering Q 1,3,4. Q2 is a wildcard due to Y2K lockdown". I suspect sell siders will get strong guidance to temper expectations for Q2, and management will use it to build deferals. 2) High-speed access will be a $600m run rate business by CY2000 according to Don Listwin on the call. I would have expected that # to be higher. 3) Management understands how important it is to be perceived as a market leader in the carrier segment. Alot of rah-rah to assuage both investors and customers - reality is there is a huge challenge ahead. Cisco may win, lose or draw, and the answer is by no means assured. I'm happy, since we've been adding to our posistion for a couple of weeks ahead of the quarter. I'll add more ahead of July and expect to trimdown in the fall, when I expect management to begin positioning for Q2. Do I believe in the Cisco rhetoric about free voice, death of circuit switches, world dominance? Absolutely not. Do I believe Lucent is better positioned for the long run? Absolutely yes. Do I believe Cisco has a shot to sit next to Lucent as a key broadline telecom supplier someday? Absolutely yes Do I believe there is a chance that Cisco fails to capture more than a tiny portion the voice market it covets, leaving it a focused data-only player? Absolutely yes Do I believe the multiple is way too high? Absolutely yes, although I see no catalyst to bring it down until the fall. So enjoy the summer Cisco investors. Those of you are buy and hold for 10 years investors will be fine in the long run. Those of you who are more aggressive, don't be so in love with CSCO that you don't think critically.