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

To: The Phoenix who wrote (39581)	8/16/2000 8:41:12 PM
From: RetiredNow	Read Replies (1) \| Respond to of 77400

All of your comments are correct. You say that if Cisco takes advantage of early payment discounts their flow suffers. Well this is absolutely correct. The reason why is that flow is a cash flow metric that the fools have come up with. So when more money goes out the door quicker, this means for that period cash flow suffers and so does the flow ratio. It doesn't take into account discounting of those flows. However, the flow ratio is a helluva lot better metric to watch than PE or all the other metrics that people use nowadays. I've always maintained that a company's real value is in its ability to generate increasingly more cash. If that ability is declining, we as long term shareholders need to know about it. For instance, I sold Lucent long ago for these very reasons. I would have also sold Nortel for these reasons if it wasn't for the fact that at this point all people care about wrt Nortel is the revenue growth rate. When that strength ebbs, I'll be out of the stock very quickly unless they have learned to control and maintain consistent cash flows. Anyway, like the fools say, the flow ratio or cash flows in general are always your early indicators as to what will happen to a company's stock price, so we should all watch them like hawks.