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Author: sean1arch Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 46821  
Subject: Re: BMW method Date: 3/25/2004 12:40 PM
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Well I have been biting my tongue, because I hate these kind of posts, but what you wrote is (in my opinion) a little dangerous for the less experienced investor.

For some of the “newer eyes”, let's place some of this discussion in context.
Here is a post from April 2000 on the Cisco board.

http://boards.fool.com/Message.asp?mid=12402208


Anyway, lately there has been a bunch of discussion about the possibility of Cisco Systems being valued at 2 or 3 trillion dollars. I earlier posted that it is very possible. That is because I see this as "Being on the curve".

<snip>

Disregarding future splits for this discussion, for Cisco to have a market cap of 2 trillion dollars, the price would have to be $285 a share. At 3 trillion, the price would be $428. For this to occur in the next ten years, the growth from today's price of $60 would necessitate a compound rate of 16.8% and 21.7% respectively. Either rate is reasonable and should not excite anyone.

<snip>

Now, do your math. The answer is right here. Folks, it ain't that hard!

Stock Price 04/14/00: +/- $60 per share
Stock Price 03/25/04: +/- $23 per share

Here is a chart of the DJIA vs. CSCO from April 2000 to March 2004

http://moneycentral.msn.com/investor/charts/chartdl.asp?ShowChartBt.x=61&ShowChartBt.y=18&Symbol=csco

I am sorry, but I would hate for a new investor to invest their retirment money based on some claims that you can help them to get rich and that it is really not even that hard.

It is very easy to think that the professional money managers, fund managers, analysts, etc. are a bunch of goofs that always underperform (I would question the claims of underperformance that seems to be taken as gospel around these message boards as well). I would submit that most of the professionals are quite inteligent and the reason for underperformance is because investing is a difficult, time consuming thing. For some context from some "professionals" there were a couple of FA'ers at the time saying that CSCO was overvalued that I would check out, notably read posts by LeBean, AtlantaDon and TMFOtter.

Best,
Sean
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