No, I haven't "proven" your point since you added additional information. You still fail to understand the one basic principle, i.e. if a company enjoys good returns, the company will sell for several multiples of book value.
During the "bubble" years, Cisco enjoyed pretty darn good profit growth and in July 2000, Cisco had a ROE of 30%. Additionally, Cisco has a net margin of 21%, currently.
Of course, with the end of the era of the "dot com" boom, Cisco's ROE fell to 6% in 2001 and was 9% in 2002, 14% in 2003, and 17% in 2004 (July). Note the trend....positive and the 17% ROE came with absolutely no financial leverage, i.e. debt.
If you think Cisco is a great short....short away. While you may be correct, your reasoning and rationale are extremely flawed. |
