What can you base a company like CSCO on? The problem with CSCO is that it is like most tech companies in that it will have a huge run-up in earnings followed by flat periods. CSCO has too much money backing it and too much talent to create a pricing model with that low of a value. That would equate CSCO to a consumer brands company that is just generating basic earnings. I would agree the stock is probably a bit pricy right now, but I wouldn't be surprised to see it have a blockbuster quarter or two in the next 2 or 3 years that drive the price up. I would be careful in a one-size fits all model for figuring out a pricing strategy, companies that are based on innovation and creating home runs while enduring the strikeouts that CSCO faces right now will kill that kind of model, whereas something like a food company or consumer products company that will do quite fine. The quality tech names are still being held partly out of blind respect as you point out, but also out of the knowledge that this is how tech works. The quality names with tons of innovative talent will at some point be leading the market again, its just right now might not be the time to hold them. However if you miss out on the best three months of the rally they create, you won't get half the returns you hope for. That is why people hold them right now. That and the fact that they are held by people that lost a ton of money on them but see no point in selling, hoping for a rebound. So its a mix or rational and irrational investors. If in this dry spell CSCO hits 40-50X EPS I would start looking to accumulate. These types of companies will never look good EPS wise in rough times, but eventually they will shatter what you currently consider fair EPS at some point in their future.