Glory Days

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Take a look at the chart below. I've deliberately left out the price axis. Pretty amazing chart, isn't it? Over a decade of breathtakingly steady price gains. What could it be? It looks a lot like Apple these days, doesn't it?

0510-csco1

Nope. It's Cisco. Formerly the most valuable company on the entire planet. Formerly the most important quarterly earnings report among all U.S. equities. Formerly the kingmaker of the Silicon Valley.

Let's take a look at the most recent decade instead:

0510-csco2

Incredible, isn't it? Cisco has, for nearly a dozen years, been more-or-less a twenty dollar stock. Sometimes it's a little higher; sometimes it's a little lower (like – cough – today). But on the whole, you can count the bills that come out of an ATM machine and lay each one of them down for a share of CSCO.

My point here is not that Apple is the next Cisco. No one has any idea what price Apple is going to be in the year 2022 (although, garsh, judging from what the folks on CNBC say, I guess $1,000/share is just around the corner). My point is that no stock proves better how dangerous it is to fall in love with a company. And that's all I've got to say about that.

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