Stocks For Dad
TMF DotCom's Stock For
Dad
Cisco Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CSCO)") else Response.Write("(NYSE: CSCO)") end if %>
170 W. Tasman Dr.
San Jose, CA 95134-1706
(408)
526-4000
Company
Snapshot
Hi Dad! Happy Father's Day!
It's that time of year and once again I think I have a tender little tidbit
of a stock pick just like the one I gave you last year. Now, remember, past
performance is no guarantee of future results, but a year ago I told you
about Sierra Semiconductor <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SERA)") else Response.Write("(Nasdaq: SERA)") end if %>, and since then it has doubled
in value, from $12 on June 1st, 1996, to $24 a share last week.
Well, the sector I cover, networking, has been really turbulent lately and
the best way to sum it up is "unpredictable." This is an industry where
technology changes so fast that it is impossible to predict any kind of business
or economic cycle. There's an ad on the radio that points out that when you
build an airplane, you expect it to last 20 years, but when you build a server,
there's a good chance that you'll be replacing within a year.
That's why I'm recommending CISCO SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSCO)") else Response.Write("(Nasdaq: CSCO)") end if %>.
Here's what we're hoping for: This is a year of big consolidation and the
market makers love the big companies. So, instead of getting you into a small
speculative company where performance is questionable, I'm recommending a
company big enough to be an investment in the networking industry at large.
Cisco currently has their products representing 80% of the installed base
of routers on the Internet. Dad, on the Infobahn, they're like the Teamsters.
They keep the data moving, they're big and burly, and you gotta use them,
you don't have much choice. Not that there is anything unsavory about them,
it's just that they wield a lot of power. They also sell routers to thousands
of businesses for Intranets and campus networks. But that's not all....
They have a whole range of cutting edge products that are sure to have an
impact. They are developing gigabit ethernet switches that are sure to be
industry pleasers, and ethernet switches that have RSVP protocol capabilities
for time sensitive services like audio and video. In ATM, they have a whole
range of LAN and WAN products. They are also working on bringing cheaper
ATM into the marketplace for people who need the quality of ATM but do not
want to pay the hefty tolls to lease high data-rate telco lines.
Here's what to look out for: Long story short, Dad -- they already have the
market position to be very profitable for quite a while to come, plus they'll
have a whole range of cutting edge products ready for market very soon. The
only danger is a sector slowdown where technology stocks fall out of favor,
but we just passed through one of those and we seem to be back on top. I
recommend to you, Dad, buying on dips with the intention of holding long-term.
Happy Father's Day!
Paul
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