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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: lawdog who wrote (38120)	7/6/2000 2:09:04 PM
From: GVTucker	Read Replies (1) \| Respond to of 77400

lawdog, RE: The market as whole, techs especially, has been manipulated. One example of large scale manipulation is the claim that bonds are riskier than stocks. The public has been fed b.s. for years and now this b.s. has become "fact" because nobody will question it anymore (or at least if they do they get no press). As for other forms of manipulation, csco would be difficult but not impossible to walk up. Aggressive growth managers acting in concert could do so. There is also a secondary effect of a bastardization of valuation yardsticks by the overall manipulation. This is not a 'fact'. The notion that bonds are riskier than stocks is held by a decided minority. Just because they yell loudly does not make them any less of a minority. And unless you believe that this minority does not believe what they say and instead are just trying to manipulate security prices, you a) way overstate this minority's power and b) do not understand how securities are priced. Once again, you have no evidence of manipulation, just a highly suspect theory that has no teeth. As for German Gaap, give me a break. Germany accounting standards DO NOT allow companies to make it up as they go along. Please put a couple of examples in a post. Quoted directly from Investment Analysis and Portfolio Management, the main investment textbook for aspiring CFA's: "The German variant [of GAAP] allows underevaluation and emphasizes hidden assets, understatement of profits, and minimal disclosure....this model takes the overconservative approach to an extreme by providing a huge hidden reserve in a form of excessive inventory write downs, very high charges for fixed asset depreciation, and very large provision for doubtful accounts and contingencies." The combination of minimal disclosure and these discretionary reserves permit much, much more manipulation of the income statement. I find it comical that you would infer that you prefer this method of accounting over ours. With US GAAP, an investor can adjust the income statement until it makes sense from an investment perspective. The public would be aware if csco's P/E suddenly soared to 1000 or higher. People are basically lazy, including plenty of analysts and money managers The public has shrugged upon seeing CSCO's PE rise from 20 to 100. I'm not sure a further rise based only upon an accounting change would make much of a difference. It will take the inevitable slow in earnings and revenue growth for people to stand up and take notice that paying 100x earnings for a multi-billion $ company cannot be justified.