mm - one at a time, there is much to discuss.
<<Look back several posts. I posted a lot of links showing Cisco's position in the market segments they compete in, the expected growth of those markets by industry experts, and a whole host of other facts.>>
I did. I also did some quick arithmetic and figured out that it is so unlikely CSCO will attract a revenue stream of 75 B$/year (constant 2001 dollars) for 20 years. I challenge you to post a quantitative counter argument here.
You can not do it. You can post all of the hyperbole you want, but it is smoke without substance.
Weren't these the same "industry experts" that were trotted out this time last year? The ones who got the market size wrong? The ones that all the dot-bombs referred to for market segment sizing? Hmmm... we should trust them why?
Just because they say what you want them to say? I think caution is more called for.
<< The fact that you choose to ignore those posts or claim that I'm in the clouds is just fine, but that doesn't make you right. >>
And vice versa.
I did not ignore the posts. I just added up the billions and came up a few short.
<<The market has already decided what Cisco is valued today or haven't you noticed. And btw, $3 is not what the market decided, so you have some rethinking to do.>>
What the heck does today's stock price have to do with anything? Today the market valued CSCO at just over $20 per share. With no fundamental change in news, the stock was at $15 per share. Last year at this time it was valued at just under $60 per share. All this shows is that the market is capricious and prone to change. Only an idiot would rest an argument about the price of a share in the future on "today's stock price".
Indeed, my thesis is very simple: CSCO is a good LTBH buy at around $7.50 today (this is generous). It is priced at $20 today. So it is not a good LTBH buy today.
It is a good speculative buy at $20, because there is a reasonable probability that it will go higher (and lower) but that sales when higher will be profitable on pure volatility. So it is a good SPECULATIVE buy today.
But let's not confuse the two positions, shall we?
Do not dare to suggest that the long term natural value of this stock is $20.
The point of investing is buy low sell high. Not buy high sell to some fool higher hopefully. That is for speculators.
<<Of course, the market may change its mind if Chambers lowers guidance again, but then again the stock may take off like a rocket, if he ups guidance. >>
Which I think was my point. Also note that there may be another effect on its way. The price change even if Chambers does not open his mouth factor.
There are trading profits to be made in CSCO. It is a great speculative play and has some forward momentum going. But don't confuse greed with value. That is a fool's mistake.
If you want we can split the difference: CSCO may go from its currently OVERPRICED price of $20 to an even more obscenely OVERPRICED price of $30. I can agree with that. Just like I agreed that it could go from $70 to $80 last year.
We aren't anywhere near real value yet.
John. |
