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

To: RetiredNow who wrote (56901)	1/29/2002 10:32:20 AM
From: Stock Farmer	Read Replies (1) \| Respond to of 77400

This is why I think we are in for a long period of mostly nowhere for the "big cap growth stocks". As the oxymoron waiting to happen finally catches up with itself. Still not over though. The other day I had to just shake my head at the term "pro-forma revenues" in a press release from another of these modern favorites. Kinda sad. But as long as folks are willing to chase pro-forma returns on investment, there will be an entire industry tripping over itself in eagerness to serving them. People wake up to smell the coffee at different times. The folks who wake up last though... they get the sludge at the bottom of the pot. In a kind of staying ahead of the awareness curve, seems to me that we are well served to look beyond cash flow. Now time to watch the growth and quality of "shareholder equity". After all, absent dividends, that's what gets divided up "per share" on divie-it-up day if it ever comes. Free cash flows are great. But if the company then goes and forms the Spending, Boondoggles and Misadventures Segment and promptly fritters it all away, all the free cash flow in the world isn't going to help. Even though they do their best to sweep the entire thing under the pro-forma rug. Words to the effect: "On a pro-forma basis, excluding the activities associated with [Spending, Boondoggles and Misadventures], business is great!" Hence the third leg of the three legged stool. The balance sheet. Even the least qualified of investors should scratch their head when they see the vast majority of shareholder equity growth under the heading of "Additional Paid In Capital" versus "Retained Earnings". That is, if folks even stir up enough curiosity to look there and wonder "what does this mean"?