SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 72.34-2.9%Nov 4 3:59 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: DownSouth who wrote (22611)2/14/1999 11:59:00 AM
From: mauser96  Read Replies (1) of 77397
 
OTOT..I figured out that bit about low barrier to entry, low value added, no patent or intellectual protection etc long ago, and sold my Dell for a small profit. Boy was that dumb. When evaluating these things one has to take competitor mindset into account. The competitors just couldn't give up their old ideas, and Dell profits soared. Some of the same success due in large part to competitors failings can be found in the early days of MSFT. Gateway blew its chances when it failed to match Dell's approach of rewarding executives based on the Stern Stewart idea of EVA (basically each product or project must be based on a return on your capital far exceeding it's cost). Dell capital cost is 17.1% it's return is an astonishing 249.3%, probably the best in the world. Is this return enough to expect a high market premium even if growth slows? Probably so. I'm not a DELL holder, but would probably buy at the right price based on the return on capital. Is Compaq well run? I don't think so. Just IMHO.
Meanwhile CSCO continues to be less than strong, probably due to fears of competition. When fighting an entrenched gorilla, as MSFT and INTC competitors have found out, wanting to compete and making money at it are two different things. BTW, Cisco cost of capital is 14.3% and return on that capital is a very handsome 50.9%. These figures are very similar to MSFT figures.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News