Silicon Investor (SI) -- The First Internet Community

STOCKTALK

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.

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

To: Mike Buckley who wrote (34899)	11/18/2000 9:40:55 AM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 54805

Mike, I would venture to say that if a clear picture of Cisco was needed for a viable investment, Cisco wouldn't have been able to go public by virtue of the fact that most investors don't understand their product I think this goes for the whole tech market as well as bio. If everybody followed the Peter Lynch "buy what you know" mantra to a T, Starbuck's would be at $500 and Cisco would be at $2. It is good for our economy that we are not so narrow-minded. I would point out here that you are talking about an understanding of the company's products, which obviously vary from one industry to the next. In contrast, all public companies produce financial statements that are required to follow certain guidelines (e.g., GAAP), so an effort to gain an understanding such statements (i.e., a time "investment") can be leveraged across the entire spectrum of public investment prospects. We try not to lay claim to understanding the pros and cons of a company more than the next person because in the end, it doesn't matter what the next person understands I sense you're becoming a bit fatalistic here. If you really think you can not understand anything more than the next person, then your odds of beating the market are a crap shoot. But obviously, you are trying to understand something or you wouldn't spend so much time publishing well-wrought studies of "front-office games" and so on, and presumably many more hours of research and analysis to back up your studies. And if one is not trying to understand the pros and cons of a prospective investment, what is one trying to do? I certainly wouldn't claim to understand more than a very small part of Cisco, either tech-wise or accounting-wise. But that doesn't mean I can't try to understand a piece of it, and in my amateurish way, to make a point about how a particular trend seems contrary to what the common perception may be. I believe accounting is something that should not be ignored. The rules of reporting in SEC filings are supposed to simplify things for the average investor so that you can understand what a co. is doing without being a CPA or writing your PhD thesis on "History of Cisco". But in fact, we find it is rather confusing, because cos. are constantly restating this figure or that without presenting notice in later reports. Still, I think it is worth some effort. Incidentally, I have an interest in Cisco not as a short or long play, but as a bellwether for tech and also for Cisco's stock-centric way of evolving its business. I believe this is a rather new trend in the business universe (compared to, say, a debt-centric cash flow model), which has thus far developed in a pretty favorable secular environment. While Cisco is perhaps the co. best known for this practice, the trend has obviously caught on elsewhere (e.g., JDSU and its Pacman model). How the model will withstand more hostile business conditions remains to be seen.