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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 78.03

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Dec 24 12:59 PM EST

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To: RetiredNow who wrote (66063)	8/26/2004 11:54:06 AM
From: Kirk ©	Read Replies (4) of 77400

Chambers sells every year. He has to in order to diversify his holdings. Any financial consultant worth his salt would advise CEOs with alot of company stock to do the same. Chamberss seems an honorable guy but Ken Lay at Enron was also selling every year to diversify. Lets say you KNEW you were running a scam to divert nearly all profits to insiders via stock options (actually lowering book value in Cisco's case.) How would you get your money out of the company in a way as to not alert sharp investors that you were well aware of this? Lets say your goal was to keep the wealth transfer going as long as possible. When I try to answer this question, I look to what Ken Lay did over at Enron. I put my thoughts on "Why I don't Own Cisco" here suite101.com I calculated 26% dilution if all shares exercise. That is quite a headwind for a very large cap company to overcome. I have a stock in the sector with Price to Cash of 2, zero debt, 100% growth and low teens PEs that I'd prefer and do own before I'd consider Cisco. Clearly Cisco is no Enron, but the idea that shareholders sit still for most earnings going out the doors to insiders via dilution is proof most don't understand how to read a balance sheet or know much about investing, in my humble opinion. Thse that do know are just playing the "greatter fool game" where they buy for a trade to sell at a later date to someone who wants a well known stock.

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