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

To: RetiredNow who wrote (56742)	1/16/2002 11:00:56 PM
From: Stock Farmer	Read Replies (1) \| Respond to of 77400

Hi Mindmeld, LOL... you are preaching to the choir. Remember? You bet I do. Like back in September 2000 when Monty and bambs and I and a few others introduced all of those three bullets to try and argue you (and the even more wildly optimistic Gary et. al.) out of the view that a near term 50% appreciation from the 'temporary bargain price' (of $60) was... achem... optimistic. And them was fightin' words as I recall. LOL. We've all mellowed. But no need to overstate my case for me. I do enough of that as it is. Vis-a-vis "...believe you contend that Cisco will no longer be able to generate any cash flows whatsoever". Not correct. Actually I merely contend that the days of excess cash from shareholders are numbered. I made that point last year when predicting that the option-go-round was likely to spiral in reverse and kill a good chunk of their cash flow - both through option exercise and as a currency of purchase. Remember my "three segments of the business" series of posts? In which I showed that the majority of the cash stockpiling machine was selling slices of themselves? Most isn't all. So when this dwindles from mind boggling to merely excessive, what remains will still likely be significant. And meanwhile I suggest that shareholders will task the board of directors with greater fiscal responsibility when it comes to capital management. Or at least that they should. Having achieved an effective three year cost of capital equal to a visa cash advance is not exactly something for a CFO to brag about. And despite how it may seem, I'm not worried at all about the accounting. They are far more transparent than many of their genre. No, it's not the accounting that's radical, it's the business decisions that the ledger entries quite clearly account that have me in a lather. And we do agree on other matters. For example, that the financial statements do indeed appear sound and reflect a strong underlying fundamental business. This is not a company that's going to go out of business. No, not at all. I suspect it will remain a powerhouse for many many years to come. But even a 7 gigawatt powerhouse only delivers one watt per seven billion CSCO shares. It's not the total power that counts, it's the power per share. So what I do think will happen is that the price per share is likely to approach economic fair value much faster than most people seem to appreciate. Or want to appreciate. Which fair value is much lower than most people appreciate. All, IMHO of course. More on why I have this opinion later. John