LOL... mindmeld you will never throw in the towel!
But the battle lines are clearly drawn now on this thread between the eternal optimism that is a lifting force under the stock price, and the pessimism that is drawing it like gravity towards single digits.
The bubble is either "half empty" or "half filled" - depending on your point of view.
I would just like to enter the discussion somewhere in the middle with a brief reality check.
Who cares whether Cisco is the king of supplying widgets and gadgets. Or the degree to which these widgets and gadgets "could" change the world.
Surely someone should have noticed by now that when a bubble affects Cisco's customers, and they stop buying, then a warehouse full of gadgets in process is worth something less than zero on the earnings statement.
Pause briefly and ask yourself "Why do Roth and Chambers have no visibility?"
The answer isn't because they can't see their own order books. It's because they can't tell which of these orders represents leftover froth, and which represents sustainable demand. Or maybe they don't want to believe the word "zero" coming back from some of their customers, who may also be trembling in fear for saying it.
Excess components in the system? Sure. So why not finished goods? Think for a second: where these would show up on CSCSO's earnings? Nowhere. Barely identifiable leven on their customer's books. But if identifiable, they would show up as slowly depreciating assets. As assets for disposition by liquidators. As assets being sold to raise cash. But nowhere on the company's order books except as negative potential...
Nobody seems to admit the second half of the oversupply problem. Excess output. Until this has washed out of the system, the bubble will not have finished bursting.
Until the bubble finishes bursting, there is no way to tell the size of the market, or which will grow or shrink. Or what demand is real or just left-over froth from previous supply agreements. Throwing more technology gee-whiz into the equation is fun... for the techno-types.... but meaningless. And indeed, dangerous.
So if you want to go ahead and pay a premium on the stock as though you can accurately forecast the next 50 years worth of CSCO's business, go ahead. Me, I think I'll see if I can't find that ten year old prototype videophone I rescued from a scrap heap.
If I do, I'll dust it off and put it on my desk as a reminder of all the great technogeewhizchangetheworld stuff that hasn't managed to change it that much after all.
And re-affirm that I will not buy back in to the networkers... not yet.
John. |
