Slight correction, none of Cisco's LT investments are in T Bills. Bills that mature in less than 3 months are in Cash and Cash Equivalents, T Bills that mature in more than 3 months are in Short Term Investments. And there can be more equities in LT Investments than you imply. Note that in fiscal 2001, according to the 10-K, Cisco experienced a $5.76 billion decrease in net unrealized gains on LT Investments. That leads me to believe that a good deal of LT Investments, at least back then, was in equities. Given the volatility of the markets during that period, that number is probably a pretty reliable worst case scenario.
For the most recent 10-Q, Cisco reported that the fair value of investments decreased $118mm over the first 6 months of the current fiscal year. At Q end (Jan '02), The fair value of Corporate equities, a subset of LT Investments, was $1.335 billion, compared with over $12 billion in LT Investments. So while right now LT Investments are mostly corporate bonds, as you state, Cisco has shown that they can get carried away with market activity, like most everyone else. |
