|
CSCO? Do you realize that CSCO with a market cap of over $400 billion and revenues of $20 billion has already discounted phenomenal growth? GE has the same market cap, and it has more than 5 times the revenues of CSCO. GE is all over the place. turbines, aircraft engines, power systems, applicances, TV network, financial services, plastics. they are a huge conglomerate. How is Cisco attractive? They make parts for the Internet, which is nice, but the size of their market is small compared to the size of the markets GE is in. CSCO already discounts that it will grow to account for maybe 6 to 7% of the earnings of the entire S&P 500. If we have to be paying out that much money for Internet infrastructure every year, it is not going to be so economical. Think about $400 billion. That is the present value of the future dividend stream from CSCO. Sit down with a spread sheet and work out how big Cisco has to get, and how fast, to simply justify where the price is already. I tried to justify it and could not. So I sold my CSCO. |
