$CSCO, the wrong song...

Dasan commented that Barton Biggs didn't understand CSCO's valuation of 12x p/e thinking it could grow at 12% a year.

This is interesting, because Dasan is a very good tech investor, and I am not, my knowledge of Biggs as a stock picker is minimal, meh.... he does write a good book though.

I think if you are used to looking at beaten up industrials and searching for "value" you could make justify buying a whole handful of names; $INTC, $HPQ, $DELL, $MSFT, $PHG, all of whom have forward p/e's of under 10x, all of which have had positive top line growth over the last year, and three years compounded, all have pretty decent looking balance sheets, and certainly let you feel safe and familiar.

What is an appropriate multiple for these sorts of companies, tired, almost utility like structures, with fewer growth opportunities I'm not so sure market like multiples make that much sense, neither do these companies have hard barriers to entry, or perpetual demand for their particular products like you do with a water company. For these names to be attractive, one might actually need to see deep value multiples.

Where does that leave CSCO? well firstly there are a few other stocks that look a lot better, but on a 5xadj ttm p/e and adding in the spare cash on the balance sheet $3.86 + 5x1.32 = $10.46

So we are a long way from where I care...