Tom:
> Addi has always been a shameless bull,
Thank you for the complements.
> The beachfront property analogy is bad on many levels. Most obviously, that property will always be beachfront property.
Not really. Like I said earthquakes happen, and then you have your occasional hurrcaines, fire, and riots! Therefore by these well known facts in California one should not even consider buying a beachfront property in San Diego!
> Cisco's only asset is the brainpower of its employees
And similar to having earthquakes, fire and riots causing your beachfront property disappear, employees can die (e.g. hit by a truck, shot at work, commit suicide, etc.), or simply leave for a better paying job! Therefore one should not consider buying CSCO at all!
It seems one can look at life in so many ways. What matters the most is the interpretation of how one views the world. I am an optimist by nature and therefore I look at things in a manner that a pessimist may call me (as someone did on this thread) an Idealitic fool! Of course I can turn around and call them blind ignorants (which of course I wont)!!
The fact remains: Cisco is a networking powerhouse with $17 billion cash and no debt currently doing business in an enviornment with extremely weak macro economic conditions. However because of its dominant position as a market leader, and its huge cash (which makes it the king of kings in this market), it will take market share away from its rivals (that have horrible balance sheets). Customers rather bet on companies with strong balance sheets than the ones that are questionable.
In 1992 Ross Perot used to say he was against special interest groups in Washington. I remember one profound statement made by someone who said: "well that is nice, but Ross Perot "IS" the special interest!". Similarly people say CSCO can not grow 50% as it did previously because it can not grow more than the market in which it is doing business with so many rivals in it at this time (i.e. the likes of JNPR)! Well, I submit that Cisco "IS" the market and therefore it can grow as much as it wants to. In fact I go a step further and say that 50% growth is an extremely conservative number. The Internet economy is here to grow. Forget about the .com glitch of 1999-2000. The evolution process is moving forward and establishing a base for the network computing to grow at an exponential rate beyond anyone can possibly imagine.
When looking back in 2003, at $140 Billion, CSCO will look extremely cheap, and so many of the wise guys (calling themselves analyst with their specialty in CSCO) with their current superficial rational will either be cursing themselves for being such fools, or simply will have changed their names form the fear of being looked upon as fools! And at that time - if we all are still around - it would be interesting to see how all the people on this thread feel (the ones who tend to scream that CSCO is worth $3/shr and calling people like myself as "idealistic fools".)!
Regards, |
