As I recall your target is 6.
on a whim i changed my target to 3 yesterday. i was peeved by the large write-down, but this is rather tongue-in-cheek. i think the WSJ article i posted a link to is quite worth the read. it certainly helped me understand the inventory situation much better. i am left with the feeling that the huge write-down is in part the result of management hubris, but i also feel they will take steps to ensure that such does not happen again. so in the end, i was left with a positive outlook from that article, even though it focused on the negatives.
It's hard to visualize what more bad news we'd see that could drive it down 66% from present levels.
Do you have a scenario in mind that could cause that to happen
if and when shareholders puke up the stock to a level i believe ensures long-term value, i will buy in regardless of my professed "target". the thing is, i must discount down to real operating earnings as i do not consider financing-related gains as anything but a windfall. therefore, i consider the already-high multiples applied by the market to be even higher according to my judgment (whereby earnings are discounted by financial windfalls), so consequently the stock price must be lower for me to consider it a bargain.
having said all that, i have no idea if the stock will get cheap enough for me to buy, but i am a patient soul. i have done all the gambling i need to do on greater-fool momentum investing for this lifetime, so i will take bargains or nothing at all.
i guess time will tell. keep in mind that 6 dollars--or 3 dollars, or 10 dollars, or whatever--is arbitrary and fluid, and is in today's dollars. one possible scenario is that cisco's stock goes nowhere for 10 or 15 years--maybe trades in the range of 14 to 25, say--but the company becomes more intrinsically valuable, and meanwhile the value of a dollar declines due to inflation. so it could be that buying csco at 25 in 15 years is a better bargain than buying it at 19 today. again, time will tell! |
