Forum Archive Index - October 2001

["Peter" <pmaiden@xtra.co.nz>]

Brian - Nick and Jesse think that there is a bit of talking up the market in US. The people on CNBC are more subdued than they were but still are pretty enthusiastic about the good times ahead.

 

I tend to agree with Nick and Jesse. The last thing any US company wants is a total break down in consumer and investor confidence - so let's cheer them up.

 

Cisco are in an unfortunate position in that they are still probably the most widely held share in the US. You would not want too many to get too depressed too quickly - let's bring them down to earth gently.

 

You asked whether stability is beginning to emerge - as said in the article, maybe a hint or a glimmer.

 

What we don't know is what 'adjusted earnings' mean. In Ciscos case  2 cents of earnings (however they are calculated) is better than a loss. No wonder the shares went up 20% on Friday.

 

At the end of the day one still must assess whether the likes of Cisco and Corning are over or undervalued on fundamnetal performance.

 

Even at $15 Cisco is trading at more than 5 times sales and 40 times the record earnings made a few years ago.

 

In my view $15 is still too high.

 

If things have 'stabilised' what does this mean for the future? Can we expect strong sales earnings to come through that will fuel another bubble on the Nasdaq with over inflated stock prices? or will sanity prevail and allow any steady improvement in sales and earnings be reflected in the current share prices?

 

Cheers

 

Peter