JBL: The Ultimate Equity Tag-Team

I have seen some prima donnas in my lifetime, but Cisco deserves to be one.

Another thing I like about Cisco is what it does with its cash. Cisco acquires companies and spends money on research and development. I couldn't believe that Microsoft (MSFT Quote) couldn't find something better to do with all that cash -- i.e. a bigger stock buyback, massive R&D spending -- than make one ridiculously large dividend payment.

To me, Microsoft not investing in its own company is an indication it does not believe it can grow organically. By comparison, Cisco is using its cash to get into new markets like IP telephony, wireless networking, and storage. Cisco is targeting a total of 12 new markets it believes could each generate $1 billion in revenue over the next several years.

What Cisco does is the equivalent of having Bruno Sammartino, Hulk Hogan, Stone Cold Steve Austin and The Rock still under contract, plus the current and future WWE superstars under contract as well. Cisco has owned the past and has made sure it will own the future as well.

There has been some concern over future earnings at Cisco. That's probably why the stock sells for under $18. Throw in a CEO like John Chambers and you have a great long-term outlook with an opportunity to get in at a bargain price; I recently added to my pre-existing position in Cisco.

I understand that John Chambers can see a storm coming and still plan a picnic. Despite his sometimes overly optimistic views, he has proven he can lead a company with huge market share and hold on to that market share. Personally, I prefer a CEO that is very optimistic. Mr. Chambers belongs in the main event.

The Crusher

Have you ever seen wrestling when one guy comes out with all the pyrotechnics and a fabulous costume? He usually has a great name like "The Crusher" and sometimes is pitted against a guy with no pyro and no costume named "Bob." Bob usually doesn't do very well.