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To: The Phoenix who wrote (22122)	5/6/2000 6:44:00 PM
From: sea_biscuit	Read Replies (2) \| Respond to of 25814

OK. I see this discussion has gone on too long. So, let me make a note of your posting. It's #22122. We will revisit this one later. And let's see what kind of contortions you will come up with at that time (of course, if you don't have the time to respond at that time, I can understand! <g>) In parting, let me provide one more nugget of information. It may be lost on you, but let me put it here all the same : ----BEGIN EXCERPT---- Standard options practice. . . In April's edition of Bloomberg Magazine, Loren Steffi wrote an article entitled "The Option Charade." It puts Cisco under the microscope to discuss how much option issuance has helped the company's bottom line. I've talked about this before, but folks need to remember that a company's employee expenses are reduced when employees get paid in options, but the company also gets a tax break to increase its profits. Believe it or not, U.S. tax law allows companies to deduct as a corporate expense the capital gains paid by their employees when they exercise their options. It's completely absurd, but it is what it is, and this is another reason why tech earnings are overstated. Last year, for example, Cisco got a boost of $837 million to its July 1999 fiscal year using that tax benefit, which represented 40 percent of its $2.1 billion net income. Of course, that wasn't in the earnings announcement - you had to go to the cash flow table in the 10k to find that out. Safety in numbers. . . In this case we're using Cisco as an example - in other cases we've used Microsoft - and this is not to pick on either of those, but this is going on all over corporate America, especially in technology. These behemoth tech stock earnings are dramatically overstated, while at the same time their valuations are completely absurd, which is why they're going to have so far to fall. I know some folks don't like to read about this stuff, but I continue to believe that being forewarned is better than not knowing. Author : fleckenstein@go2net.com ----END EXCERPT----

To: The Phoenix who wrote (22122)	12/18/2000 7:07:24 PM
From: sea_biscuit	Read Replies (1) \| Respond to of 25814

OT: What do you say now? Down over 35% from where we were 7 months ago! My take: CSCO, like MSFT and INTC is a technology franchise with probably the greatest marketing team in the world. But its valuations are still way too high. It is a good long-term buy when it dips below 30 (INTC and MSFT too, at below 20 and below 35 respectively). However, even though these are the best technology franchises, these are still not likely to do as well as other franchises -- such as KO, G, DIS, MRK, PFE, and BRKA/B. So I think one should limit each of these tech stocks to about 1.5% to 2.0% of their portfolio.

To: The Phoenix who wrote (22122)	3/28/2001 2:15:27 PM
From: sea_biscuit	Read Replies (1) \| Respond to of 25814

Well, now we see why personal income and spending is important, even for a company like Cisco that sells its wares to non-consumers. The stock has come down 80% from its highs, since I posted here that it was ENORMOUSLY overvalued. It's been less than a year, but what a difference it has made! How low can it go from here? I would say mid-to-high single digits. But that won't be the shocker. The shocker will be that it will stay at these levels for a long, long time a la the IBM of the early 70's. Remember it took over 2 decades for IBM to get back to its highs? And IBM was one of the successful ones that managed to survive...

To: The Phoenix who wrote (22122)	5/8/2001 7:26:29 PM
From: sea_biscuit	Read Replies (1) \| Respond to of 25814

It's nice to revisit these old postings once in a while. A year ago, I said that CSCO was overvalued, and I based my opinion on figures about personal income and spending. And now... CSCO is wayyyyyy down from its perch and everybody is talking about how consumer confidence is so important and how consumer demand is 2/3 of the economy and so on and so forth. Today, a year later, CSCO has laid off some 17% of its people, sales are down, earnings are down, the stock is down... They used to say that in Silicon valley, there are two types of engineers -- those who work for Cisco and those who will soon be working for Cisco. I suppose the folks that were laid off might find that a little amusing.