Hi Chuzzlewit,
I would understand your reason for sold CSCO. You are looking into
numbers very deep, and so do I. But, I also look into CSCO growth
opportunity. Here is what I figured: If you look at big picture, I
think the internet is projected to grow 30% to 50% year over year
for next 5 years. Who would be greatly benefit from such growth?
CSCO is one coming to my mind. It sits in the sweet spot. It does
not have products transition problem like LU does. Its product cover
about just 80% internet business segments. It may not have best
products in the world, but it presents in there. So it looks very
good. What is the risk? CSCO is not as competitive as it was in the
past. New product cycle is taking longer time. It current new
development has to support legacy product just like MSFT "Windows"
Compatibility is taking long time. I just don't see there is anyone
can take over CSCO's position for next year or two except they totally
screwed up. Given superior management team they have, the probability
of total screw up is small. I think I can handle this risk.
As far as stock price goes, I have time on my side. I am looking 5
years out. I estimate Cisco may grow into 40 bil company by 2005. By
holding the stock instead of trading, I can defer my capital gain tax
and stat income tax to the day I sell, I don't have to discover
new company to invest which normally is very risky, and I don't have
to spend time to active managing my account. Over the years, I have
seen so many people get rich so quickly by doing nothing to their
holdings.
Best Regards, |
