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

To: RetiredNow who wrote (60404)	7/23/2002 4:09:12 PM
From: puborectalis	Read Replies (3) \| Respond to of 77400

Depression.......1929 charts and todays' charts very similar.................Analysts at research and money management firm Bridgewater Associates point out that this is the first time since 1930 that the stock market has fallen in the face of aggressive Fed easing. "In that sense, we are in uncharted waters. Clinically speaking, a recession is an economic contraction brought on by tightening and ended by easing. A depression is a self-reinforcing economic contraction, perpetuated by debt liquidation in which central bank easing is impotent to reverse the contraction. Recent market action is symptomatic of depression," Bridgewater pointed out.

To: RetiredNow who wrote (60404)	7/23/2002 10:24:12 PM
From: Stock Farmer	Read Replies (1) \| Respond to of 77400

I can't remember what John came up with when we talked about it last, but wasn't it something like 2/3 of the $21 billion in cash and investments that Cisco has actually came from equity financing through stock options issuance. John do you remember? 1 B shares average price $35 or so. Would make 35 B$ worth of shares doled out. Half of which was options, the other half as purchase acquisitions, mostly written down as "in process R&D". They kept 21 B$ if you look into what they record as paid in capital... hey, coincidentally just about what they currently have as cash and equiv's. I wonder where the rest went? Could it have been insiders? It takes a special management team to make 7.5 B$ in profits while spending 14 B$ along the way while nobody's looking. John

To: RetiredNow who wrote (60404)	7/24/2002 8:47:56 PM
From: ahhaha	Read Replies (2) \| Respond to of 77400

When a company has so much cash sitting on the books, not only are they not fulfilling their fiduciary duty to shareholders but there is an inherent agency problem. Their incentive is to spend the cash unwisely during boom times and to not take enough risk with it during downturns like now. Whatever the absolute truth of your assertion, it does bring up a major problem for CSCO. How do they use the cash they have to make earnings grow? The old model of buying sales and R&D within the confines of their existing business model and expertise simply won't work in the current environment. They either have to distribute the company or find new investments outside of their expertise. The latter brings in your point about spending unwisely, but the condition under which they might do that is opposite to what you suggest. They end up spending cash unwisely during bust times. The former implies CSCO must spin itself into five core business entities. This makes a lot of sense from a risk perspective. Reduce the total risk by providing the surviving entities with distributed cash to support ventures which severally reduces the risk thereby effectively employing the cash. It's as though the cash could be effectively used if it wasn't so large a quantity.