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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: chaz who wrote (34415)	11/7/2000 3:31:33 AM
From: Mathemagician	Read Replies (1) \| Respond to of 54805

Even DS will agree with you that such a development is very unlikely. First, even if CSCO's growth rate increases, that could only happen (over the long term) if the economy growth rate likewise increases. AG would soon put a stop to that, no? Well, one thing that we keep forgetting when discussing this is that CSCO's growth rate is part of the economy's growth rate (i.e. CSCO is part of the economy). Thus, it is more correct to say, "If CSCO's growth rate increases (over the long term) then the economy's growth rate WILL increase." The result is that as CSCO's contribution to the overall economy increases, it will eventually overshadow the contribution of all of the other companies combined. One company's revenues can never be bigger than the economy because that company is part of the economy, not because the size of the economy places some theoretical limit on the revenues of a company. The question then becomes, "What is a good theoretical limit on the revenues of a company?" That is a difficult question to answer and I don't know if I can do it at 3am or even if there is an answer. I guess you can't keep me from trying, though. If CSCO's January revenues were equal to all of the money on Earth, they could spend that money in February and earn it back in March... In that case, CSCO's revs would be 6(All the money on Earth). Now, suppose they earned it all and spent it all in just one month. Their revs would be 12(All the money on Earth). Make the process happen N times per month and their revs become N12(All the money on Earth). Since there is no theoretical limit on how fast they can collect money, N can be arbitrarily large. Therefore, there is no theoretical limit on CSCO's revenues. How's that for some random thoughts? Maybe it's just late... M P.S. Nice call on the divisor, Chaz.