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

To: rkral who wrote (66607)	11/27/2004 6:49:32 PM
From: Dave	Read Replies (2) \| Respond to of 77397

B/c Cisco earns an outstanding ROE. For example, if you owned a pinball machine that cost you $10 and you earned $50 per year running that pinball machine, would you sell your business for $10, i.e. the "historical cost" of the pinball machine? Typically, businesses that earn high ROEs and ROCs sell for several multiples of book value. Since Cisco has a pretty high ROE at least 20%, do you expect the market to "value" Cisco at close to its book value?