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

To: JeffT who wrote (56682)	1/15/2002 3:18:23 PM
From: JakeStraw	Read Replies (2) \| Respond to of 77400

>>...but why argue about whether capital is really debt. Nothing to argue about. The answer is a flat-out, nothing to debate NO!

To: JeffT who wrote (56682)	1/15/2002 5:49:49 PM
From: Stock Farmer	Read Replies (1) \| Respond to of 77400

No, I don't quit. And I'm not arguing that capital is debt. That's just you being silly and flipping words around. If you like to debate things that way, be my guest. But it's not productive. I'm merely asserting that the exchange of capital from one party to another in return for a continuing relationship of future obligation IS debt. The capital is not debt. The obligation is the debt. Which obligation itself can be capitalized, packaged and sold. Because the promise of a return, net of risk, represents an asset that can be capitalized. Again, think mortgage. Or capitalization of a receivable for a service contract. And I have gone so far as to explain why this point of view makes sense. You on the other hand offer up no explanation and merely assert the opposite. Which may very well be CPA certified true. But then, so were the books at Enron. To me (and to Enron shareholders, it seems), the reasoning is more important than the facts on their face. I do not care to argue with the words being used versus what is being said. I care to discuss and understand. If you don't want to do so, then by all means let's move on. Your other questions: like my position in Cisco and my thoughts on the stock price. At the moment, my bias is clear: IMHO the prospects of earning a profit through the long-term ownership of big-cap tech growth equities are dim. Negative, in fact. Given current prices relative to economic potential. Long/Short/Neutral/Out? I'm out. Been out of techs since July 2000. Was a super-optimistic permabull. Took off the mind-control device. Cashed my chips, took them off the table and started to post. I am not and have never been short the market because it's one thing to be right in long-term bias and it's another thing to find one's self over-leveraged against the trend. Which I have never discovered first hand, but sure hear a lot about recently. We could stop there, but the days of "it will go down/no you moron it will go up" on this thread are thankfully over. A lot of folks having been humiliated in either direction by being found dumber than the morons they argued against. Self included. We know the taste of crow. Instead these days we find ourselves on this thread discussing the REASONS behind our positions, and making reference to facts wherever possible. We don't always agree with each other... but we do try to reach understanding of what each other is trying to say. And maybe toss in the occasional hand grenade... just for old times' sake ;) Anyway, one of the reasons behind my position on tech stocks is that they have been growing shareholder equity by selling slices of themselves. So the growth is inflated at best and illusiary at worst. And a whole bunch of folks can't see past the very proper, very correct, CPA certified accounting to recognize what's going on. Except perhaps some of us who like to look at the world through simple eyes. Even if we are or are not accountants. Like I expect a company to generate as much or more in value than the price I pay for my slice. Really simple. Equally simple. Like when I give my capital to the company, it's a loan, not a donation, not a sale: I expect to get my money back. Not because I can own something I can trick some mental midget into paying more for. Because there is a reasonable expectation that the company will generate and attract commensurate economic return. And that I am owed my share on divie-it-up-day. And according to game theory I am best advised to act as though all shareholders think similarly. At least on average and over the long run. Equally simple. That the collective "shareholders" should place the same value on a company as a sole proprietor with infinitely deep pockets. Or maybe just a little bit less, because in aggregate they actually have less control. It shouldn't be the other way around. Also simple: that any disparity in valuation between what a sole proprietor would compute and what the aggregate collection of folks in the market place are paying represents the long term potential for profit or loss. Depending on which way the difference goes. And finally, that I am responsible for my own evaluation and my own decisions. The difference of opinion between me and Mr. Market is the source of my profit (or loss). And I'm so far ahead on that score that I no longer need to work. But I am reminded that pride goeth before a fall. So maybe I'm wrong. And the risk for me is to ignore a "strange" perspective, and instead to take a position based on what I think the truth is, only to discover to my chagrin that it went the other way. That's why I don't quit. John