The other day, I was listening to some commentary on CNBC financial news discussing the future outlook and forward-looking projections from Cisco Systems. Generally speaking, the tech sector and the analysts from Wall Street investing in the computer and technology industry used Cisco Systems as their bellwether. However, it appears to me moving forward that Cisco may not be good the right baseline. Let me explain.
Did you know that if Apple computers had been amongst the 30 Dow stocks in 2009 that the Dow Jones industrial average would be 2500 points higher than it is right now today in May of 2012? It’s true. And if we took Apple computers as the new bellwether for the computer and technology sector it would have outperformed all of the others (combined) and actually taken away quite a bit of their market share, and profit potential as well. Therefore, I would not suggest exchanging Cisco Systems for Apple as the new baseline, but I would recommend taking Cisco’s performance and future projections with a grain of salt.
Next, I’d like to explain that the personal technology sector is much different than the IT sector. Oracle, SAP, IBM, Cisco, and others including all of those companies working on government and military contracts for cyber security are in a totally different realm. The smart phone, tablets, and personal tech markets are global, and unbelievably broad in nature. One thing I had always noted, and I noticed this in technology news – is that technology has almost become synonymous with Apple. That kind of leaves everyone else out in a different category.
Am I saying that Cisco is irrelevant? No, of course not, however taking their statements and conference calls as an estimation and potential progression of the entire tech sector makes no sense whatsoever. Much of the government spending has to do with decisions made in Washington DC, lobbyists, and congressmen with pet projects to modernize the federal government with more computers opening the way to the future eRepublic – government as a giant computer and website – hmm, that might be okay?
Businesses and corporate expenditures on IT does have some bearing on the personal tech market, but not very much, as it is only one venue for companies like Apple. These Cisco conference calls are always enlightening and helpful, but they do not appear to be as important for projecting the future in technology stocks as they once were. Indeed, I hope you will please consider all this and think on it. If you’d like to discuss tech stocks, go ahead and shoot me an e-mail.