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Lee and I rewound the clock about 25 years, back to the height of the dot-com boom. At that time, Cisco was one of the hottest stocks on the planet, sitting at the center of the internet infrastructure buildout.
The dot-com peak and collapse
Lee reminded us just how dominant Cisco was during that period. The company’s stock surged into the $75 to $80 range as investors bet aggressively on internet growth. When the bubble burst in 2000 and 2001, Cisco did not fail as a business, but the stock collapsed and stayed buried for years.
That distinction matters. Cisco survived, but survival is not the same thing as delivering returns.
Why Cisco never disappeared
We both agreed that Cisco never truly went away. Its networking equipment remained essential, first for corporate IT and later for data centers and cloud infrastructure. Today, those same products are part of AI-related buildouts, keeping Cisco relevant even if it no longer dominates headlines.
The company’s bread-and-butter business gave it durability when many former tech darlings vanished entirely.
A warning for today’s tech investors
I emphasized why Cisco’s story matters now. During the dot-com era, expectations for the internet were wildly exaggerated, much like parts of the AI narrative today. Even when a technology changes the world, stocks tied to that theme can remain underwater for decades if investors overpay at the peak.
Lee added that investors who bought Cisco at the bottom in 2001 or 2002 did very well. Those who bought near the highs had to wait roughly 25 years just to break even.
Dividends and patience
We closed by pointing out that Cisco eventually became a reliable dividend payer, which helped long-term holders endure the long recovery. It was often featured in lists of tech stocks that actually returned cash to shareholders.
The lesson is simple but uncomfortable. Any company, no matter how dominant, can get buried by valuation excess and stay there far longer than most investors expect.
Transcript:
[00:00:05] Doug McIntyre: I’m gonna go back, maybe 25 years. And the hot tech stock at that point was Cisco.
[00:00:13] Lee Jackson: It was one of them. It was on fire because the internet build out was huge.
[00:00:18] Doug McIntyre: Yep. And they were at the center of the infrastructure play.
[00:00:22] The internet now, they’ve disappeared. What happened to them? Where have they gone?
[00:00:27] Lee Jackson: Well, they didn’t disappear. They just went on vacation for about 25 years. And I thought it was interesting recently because Cisco systems still, their products are still needed. They’re still, and they’re probably selling lots for AI build out and data center build out.
[00:00:45] I’m sure they’re selling a ton, but it took 25 years from the peak of the .com boom. For Cisco, which I think it hit like 75 or 80 bucks, and this is like 2099, 2002, 25 years. And just recent, recently, within the last week or two weeks, it finally got back over that level finally, after 25 years. Now, had you bought it then, at the bottom of barrel in 2001 and 2002, you, would be doing great, but Holders back then, and this is why, this is a lesson for everybody chasing Mag seven and everything else, I mean, Cisco systems survived, because they had a bread and butter sort of product that they could continue to sell.
[00:01:36] But I mean, everything was over exaggerated about the internet, just like it is about AI. So if you held for 25 years, God bless you. You’re even if you bought at the beginning of the sell off, then you’re, you’re in the money and, for the rest of you, Cisco’s a good company and it pays. I still think it’s, it still pays a very reasonable dividend.
[00:02:02] We used to do, articles on 24 7 about tech stocks that paid dividends, and it was always one of them, and that’s one of them. Yeah, and so, but it just shows you I don’t care what company it is, you can get buried and you can stay buried for a long, time.
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