Back in 2000, Cisco (CSCO) CEO John Chambers graced the covers of what seemed to be all of the major financial magazines. After an incredible run in the 1990's, Cisco (CSCO) surpassed all other companies in market cap and became number one in the world. I know I have no regrets about owning shares in it. It had 3 for 2 splits in 1997 and 1998, and, 2 for 1 splits in 1999 and 2000. In just 2000 alone it had a low of 35 and a high of 82 and you would have almost tripled your money if you bought at the lows. The press glowed about Cisco's (CSCO) prospects and how it would keep on going up because "it was different this time", we were at a "new normal". There was a cornucopia of riches in the tech sector and the gravy train was nowhere near being derailed, or at least that's what the consensus thought. In the year 2001, less than one year after Cisco's (CSCO) all time high, it was trading at 11 and in 2002, it got down to 8.
Cisco (CSCO) is still a great company. During the last decade it was added to the DOW and still does the majority of the behind the scenes heavy lifting in the Internet. The set-top box for my HDTV is a Cisco (CSCO) and besides the already available movies and television programs, they'll be streaming anything relating to cloud computing right into my living room in the not too distant future. Although Cisco (CSCO) is still king of the jungle in internet infrastructure, it's not a great growth stock anymore. It's price has been hovering in the high teens to high 20's for almost ten years now except for a brief period when it hit 34 in 2007. It doesn't even pay a dividend, so your returns haven't been very good for years.
There's nothing wrong with Cisco (CSCO), it just got to be too big of a company. The high growth period for a security has just so much of a shelf life and Cisco's (CSCO) race is run. ValueLine gives it a high of $40 in 3-5 years and that is their most optimistic projection. Doubling your money in 3-5 years is a good return on investment, but it's nowhere near what investors expect from a stalwart that not too long ago made the expression ten bagger seem like chump change. I believe that what Cisco (CSCO) was to the dot com boom, Apple (AAPL) is to the current euphoria.
Apple (AAPL) is a great company. Has been ever since the mid 1970's when Steve Wozniak and Steve Jobs founded it. Sure, they've had some products bomb, but only because they may have been too early to market like with the Newton. I use and believe in their hand-held computers and don't foresee anybody knocking them off their pedestal despite the success of Google's Android mobile operating system. The problem with Apple's (AAPL) stock is that the company is just getting too big and may not have that much more room to run.
Apple (AAPL) is now the number two largest market cap company on the domestic exchanges, second only to Exxon/Mobil (XOM). You could have picked it up for $6 in 2003 and feathered your nest with the incredible gains it has experienced, trading at around $330 now. However, that's an 8 year run and most stocks don't keep rising that long. If you invest in it now, the probability that you will double your money in the next 5 years is minimal. I could see it climbing to $400 with the momentum that's behind it, especially since they are going to be offering the iPhone on Verizon this quarter and the iPad is relatively new, but the price performance of the last 8 years is now history. If you are a buy and hold investor, I just don't see it being a very good place to put your money.