We think over time we'll build a very valuable company. The second problem is that no one knows how bad business will get during the economic slowdown for companies that are profitable, such as Cisco Systems and Intel. Both announced large job cuts last week because sales have slowed more quickly than expected. Yahoo, always expected to be the strongest of the dot-com companies, also warned that its earnings will disappoint Wall Street estimates because its ad revenues were dropping. Nasdaq is still squeezing out the excesses of the bubble of a year ago, when investors were valuing companies at stratospheric prices.
Cisco is an example of what has happened.
Yes, by the standards set by the company's blazing growth during the 1990s. But Cisco is now a much larger company, and larger companies traditionally grow more slowly. Cisco's stock remains expensive compared to the performance of Intel, the most successful fast-growing giant in Silicon Valley.