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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 77.76

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To: RetiredNow who wrote (67039)	2/11/2005 12:24:09 PM
From: GVTucker	Read Replies (1) of 77400

mindmeld, RE: I hope Tobin's Q is wrong, but it's hard to argue with statistics. In this case, I think there are indeed arguments against these statistics. The primary argument I have against Tobin's Q is that while in theory the concept makes beautiful sense in practice there are serious issues. The calculation of this statistic seems to me to be rather subjective. How the heck do you accurately measure the replacement cost of the market, anyway? Jeremy Grantham does excellent work on this front as does Andrew Smithers, but I can't help but wonder if they don't let their own biases towards the equity markets cloud the calculation. If you want to learn more about the concept, I highly recommend "Valuing Wall Street: Protecting Wealth in Turbulent Markets" by Smithers and Wright.

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