Quick responses:
1. Short interest - LU and NT short interest have decreased in the same time frame. Much of LU's dramatic decrease in short interest is due to covering by Arbs after the ASND deal completion. I hear alot more worry in the investment community about Cisco today than three months ago.
2. We own Cisco, albeit underweight the market. I am thinking about going further underweight. I would be an aggressive buyer at $40 but I need to beat a variety of metrics every month, so $66 makes me squeamish.
3. Our analysis techniques take into account alot of second-order metrics. % change in operating margin is more important than operating margin. Acceleration of earnings growth is more important than earnings. Extensive statistical research goes into this.
4. In Cisco's case, guidance is more important than earnings surprises. If Cisco were to "miss" a quarter, it would change guidance, then make the reduced estimate. Either way, you get the haircut.
5. Cisco tends to give fairly direct guidance - not necessarily pessimistic - and they tend to beat by a penny
6. Don't be silly. Comments from customers are not insider information. If you work for Cisco and you reveal non-public information about Cisco to someone on a private basis - that is insider information. Info from customers, suppliers, channel partners, contractors, etc. are totally fair game. I do hear rumblings from contacts at Sprint and Telia - are these official comments? No. Could they be slanted or even wrong? Yes. Are they insider information? No. Do they make me worried? Yes. Admittedly, alot of things make me worried that turn out to be not so important after all.
7. I totally disagree with your assertion that to characterize the challenges for Cisco as being greater than other vendors is ludicrous. No other vendor in this category labors under the weight of a 76 multiple, or is asked to sustain 35% top-line growth. Lucent is filling in its product line, Cisco is earning the trust of the carrier industry. I believe the second task is far more difficult. But then again, WDIK
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