I’ll take the other side of that fear and that trade…

I’ll take the other side of that fear and that trade…

People might call this a bubble, but I think those people have short memories of what a real bubble looked like.

For a charm of powerful trouble, Like a hell-broth boil and bubble. Double, double toil and trouble; Fire burn, and caldron bubble. — Shakespeare

If you think Riverbed’s move from the low teens to the mid $30s means that it’s in a bubble, let me remind you of what some of the charts from the telecom bubble a decade ago.

How about JDSU, which went from $50 to $1200 in two years:

Or Juniper, which went from $20 to $200 in a year:

Or Cisco, which went from $5 to $77 in less than three years’ time as we went into a true bubble, not the mini/fake/wannabe thing they call a bubble these days:

Seriously, take a look at those charts.  Does Cisco at $14, at the lowest level its been at in years indicate that we’re in a tech bubble or that we’re not in a tech bubble?  Does Juniper, which would still need to see its stock price go up seven-fold to get back to where it was in 2000 look bubblicious right now to you?   I certainly don’t expect any of these three stocks to get back to where they were at the heights of the great telecom bubble, but I do expect that we are headed into the “echo tech-o” bubble led by apps/smartphones/tablets/cloud stocks.  And I do expect that we could see these stocks double or triple in the next couple years.

Cisco’s been painful of late and we’re down a couple bucks on the trade now and I give you a sincere mea culpa for that.  But this stock is as cheap as it has ever been on just about every fundamental metric you can point to.   There is no denying that tech stocks, including Cisco, could go lower if this economy tanks and earnings plummet.  As usual, if the economy implodes stocks will likely go lower.

But freaking out over an existing tech bubble in June 2011 and selling your tech stocks?  I’ll take the other side of that fear and that trade.