yes the whole tech industry is suffering. why? maybe because the prices of early 2000 were way too high?
Cisco at it's high was trading at somewhere around 200 times earnings. Today it is trading at 37 times earnings. That is still pretty high, given that historically a solid reliable company might be expected to trade at 20 times earnings. Some of this is based on comparative yields for treasuries. One year treasuries are yielding 1.72%. Cisco doesn't pay dividends ( it's a growth stock, you know :-> ) So what are you buying when you buy Cisco stock? The hope that the stock price will grow. Add to that the economic slowdown. Cisco's major customers are cutting back. As are any other equipment manufacturer's customers. There is little prospect for growth. Reality has hit Cisco, not to mention the economy as a whole. What - you thought 200 times earnings was normal? You thought 20% annual growth rates were normal? Not to mention sustainable? The result. Cisco stock is way down, and to be truthful, there is little reason to think it ( or the market in general ) will break out of this malaise any time soon. As long as the Fed continues in it's present course, and refuses to take direct action to increase money supply ( and not just lower the discount rate ) the economy will continue to perform poorly. As for Cisco - there is a LOT of used Cisco gear on the market. Many companies, carriers, providers overbought in 2000 and 2001. They don't really need to buy more. Cisco is fighting hard to convince customers that they need to upgrade. What has YOUR Cisco sales team been telling you lately? To trade out your 2924's for 3550-24's? To trade out your 5xxx'x for 65xx's? To replace your PBX with AVVID? Oh and by the way, to buy all new switched as long as you're at it? Sorry to be so pessimistic. NRF - got anything to add? ""Erick B."" wrote in message [EMAIL PROTECTED]">news:[EMAIL PROTECTED]... > As well as plenty of other stocks... > > --- Eric R wrote: > > Just curious if anyone else noticed that Cisco is > > below $10 and Lucent is a > > now penny stock! > > > __________________________________________________ > Do you Yahoo!? > Faith Hill - Exclusive Performances, Videos & More > http://faith.yahoo.com Message Posted at: http://www.groupstudy.com/form/read.php?f=7&i=54967&t=54957 -------------------------------------------------- FAQ, list archives, and subscription info: http://www.groupstudy.com/list/cisco.html Report misconduct and Nondisclosure violations to [EMAIL PROTECTED]
