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

To: Paul Reuben who wrote (21922)	2/3/1999 10:24:00 PM
From: Rick	Read Replies (1) \| Respond to of 77397

Well - I have this puppy and AOL as 20% & growing of my portfolio & they have both done well. Boring & "safe" yes - but sometimes the obvious picks are also the best picks (& historically - they have been) 60% medium-stable more aggressive and 20% very aggressive. My screw ups? Getting in Infoseek at 7 & out after not quite a double...(now 9X that or some such thing) ATHM at 34 & out at 40 (now 4X 34) - ha ha. So now - I keep a bit of everything I profit in....for the long haul. My specialty seems to be early ID. Sometimes - was my own worst enemy :-)

To: Paul Reuben who wrote (21922)	2/4/1999 12:13:00 AM
From: JC Reddy	Read Replies (2) \| Respond to of 77397

Growing by acquisition or writing off one-time charges isn't a problem here. But, CSCO primarily grows by acquisitions and taking one time charge for all of it seems like free R&D. Imagine doing this R&D in-house and your net margins will shrink. This is like Pfizer supporting no in-house R&D and acquiring other pharmaceutical companies to grow. It would be interesting to see how it would work if they try out this model. I guess CSCO is probably the most successful company implementing this model, although I doubt if this would continue to work forever. It's no wonder they can consistently meet or beat the expectations since they have so much to play with. All they have to do is increase one-time write-off (and of course this is recurring "one-time"). Something is wrong here, but it is very subtle. The best I can say is CSCO only earned $2.95/share over the last 15 years (after all the write-offs) and that isn't even close to being impressive. We will see.