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

To: Dave who wrote (66611)	11/27/2004 9:53:59 PM
From: Kirk ©	Read Replies (1) \| Respond to of 77397

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? But the bartender named Chambers and his serving wenches are taking a $40 cut each year with options... ROE don't mean squat if the bartender has his hand in the cash drawer and tells you, the owner, you should expect $40 a year to vanish because that is what it takes to have a good bartender pour drinks. Your example proves my point perfectly!

To: Dave who wrote (66611)	11/28/2004 8:47:04 AM
From: rkral	Read Replies (1) \| Respond to of 77397

Dave, re "B/c Cisco earns an outstanding ROE." Your answer for why Cisco's equity-per-share (BVPS) is almost irrelevant is that Cisco's return-on-equity (ROE) is outstanding? Equity is irrelevant for BVPS ... but it's relevant for ROE? LOL! re "do you expect the market to "value" Cisco at close to its book value?" I'm not ... and likely no one here is. But I am expecting equity and BVPS to increase ... somewhat more in line with the reported net income and EPS. Do you expect the stock price to increase over the long-term if the book value doesn't increase? Ron