With all of the hoopla about the telco build out and the new paradigm of the internet that I see espoused on this thread so frequently csco should have already split again. Without manipulation of the stock market and a gullible investing public csco would be a $20 stock. We have discussed the reasons why I and bambs and eski feel this is a likely outcome. Tech stocks depend on the pyramid schemes that their stock valuations allow. They fuel their stock prices with stock option compensation. The tax code allows deductions for this "expense" but GAAP does not force them to report it as comp. expense. The techs, as Zooty will gladly tell you, are out in force lobbying with anyone who will listen to prevent pooling from disappearing. The U.S. is the ONLY industrialize nation that still allows this chicanery to continue. Pooling is helping to create the problem that is waiting to burst through the dam.
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Silicon Valley wants a license to fleece the rest of America. Look at the housing prices in San Fran. It’s ridiculous. But why would real estate values be any less overvalued than tech stocks that are being used to pay for them. People who depend on the stock market to make a living want the fleecing to continue. Analysts, 2 bit hedge fund managers, Buzz and Batch all want the party to go on. I can’t blame them, it’s a very easy way to make money. Easy come, easy go. And it will ALL GO.
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You also have companies, like csco, using overvalued stock as currency for purchases. No value is being created, as Buffet so astutely said in his annual shareholders meeting in Omaha. We have raisins with turds. I would rather se it all end here than have the companies get even MORE overvalued. If it stops now we will a severe recession. If it goes on another 100% on the NAS we will be risking another depression. You all want buyer of csco stock, I want to prevent disaster. Stop being so greedy and think about the long term implications of this "bull" market. It will not continue forever and more and more people are depending on equities for retirement and compensation. It doesn't take a whole lot of logical reasoning ability to see that we are heading for some really tough times if this continues much longer. Try and see the forest through the trees.
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TP, I was long this market for many years. I made very nice profits, don’t you worry. However, the more I looked at valuations of the csco’s of the stock market world the more questions I asked and the more I read. This process led me, and many others, to a starkly different conclusion about the present state of and future of the equities markets. There is no “new paradigm”. Things are NOT different this time. The markets WILL revert to historical averages for returns which will require ZERO or NEGATIVE GROWTH for many years to come. CSCO WILL return to a reasonable valuation.
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All of this has been put forth on many prior occasions by myself, bambs, eski, etc. Writing a friggin novel every time some jackass wants a “contribution” from a bear on the csco thread would be the only way to make you happy. We post it and you all forget about it, then you want it reposted and repackaged. Go back and read the analysis and commentary that we have provided. If we get snide and sarcastic it’s because we get tired of constantly being asked to repost out views.
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In summary, Buffet and Munger are right, you are wrong. Sorry. |
