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Cisco and the Kids

Posted: 25 Sep 2001  

Mark Hirschey

University of Kansas


The Nasdaq 100 Index is today's reincarnation of the Nifty Fifty. Many of today's institutional favorites feature extraordinary valuations, despite short operating histories, modest revenues, and sparse profits. At the market peak in 1972, Nifty Fifty stocks sold at an average P/E of 37.3 - versus a market multiple of 18.2. At the 2000 peak, the Nasdaq 100 sold at an average P/E multiple roughly six to eight times greater than the highest P/E ever accorded Nifty Fifty stocks. Following a historic stock market correction of more than 70 percent, P/Es for Nasdaq 100 companies remain two to two and a half times higher than peak P/E valuations for the Nifty Fifty.

JEL Classification: G12, G14

Suggested Citation

Hirschey, Mark, Cisco and the Kids. Financial Analysts Journal, Vol. 57, No. 3, July/August 2001. Available at SSRN:

Mark Hirschey (Contact Author)

University of Kansas ( email )

School of Business
1300 Sunnyside Ave.
Lawrence, KS 66045-7585
United States
785-864-7563 (Phone)
785-864-5328 (Fax)


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