Re: CSCO's Position in my Portfolio
Would be interested to hear what role CSCO plays in other GG portfolios. Decreasing in %? In your portfolio at all?
CSCO was the very first stock that I bought, way back in the Fall of '96. I was a cheerleader of the company for a long time, and I followed them tirelessly through my first few years of school.
A year ago (in January), I came to the conclusion that Cisco was way above its fair value and I sold about 1/3 of my position, essentially letting the profits, minus 20% (my expected rate of return when I first bought it) minus enough to pay capital gains on the sale, continue to ride. I learned something after seeing the price climb another 125% since that time. When you have good companies that are executing well, there's no reason to sell them (at least until fundamentals of the company change). [note: I did put some of that in the Q back in May, so I'm not complaining too much <gg>]
After their latest quarter, I've never been more confident in their fundamentals. Their market share is growing in a marketplace that has huge potential. They are a bit behind some of their competitors in the optical marketplace. But, I've seen it before, and we'll see it again. The Cisco naysayers said that Layer 3 switching would kill their router business, and Cisco was late to the market. They were late with Gigabit Switching as well. But guess who controls about half of those markets now? My point is, Cisco will enter (and probably lead!) the optical foray by the time it really reaches critical mass.
So with the fundamentals in place, I don't think that Cisco should be eliminated from anyone's portfolio. Buying at current levels is another story, and it is understandable to question the purchase.
As far as the percentage of my portfolio goes, Cisco has decreased from 100% (in '96) to 45% currently. Not because I have sold some off a bit at a time, but because of additional funds that have been added to my brokerage account through summer jobs and such.
JMO,
Justin |
