John J. Edwards III chatted on AOL MarketTalk on Monday, May 8. AOL's MarketTalk is hosted by Sage Online (Keyword: PF Live).
Live from New York, N.Y., please welcome
, assistant managing editor,
. John can answer questions about the latest market-moving news.
John does NOT offer individual stock commentaries or recommendations.
Good afternoon and welcome to "MarketTalk," Mr. Edwards!
Thanks for having me. Great to be here!
Do you agree with this week's
article that states that
As with so many things in this tech-driven economy, it depends. Certainly by many conventional measures, Cisco is wildly overvalued. But it's also possible to make a case that the company's leadership position and the way technology is changing could make a valuation in this area a fair one.
I can't make a recommendation one way or the other, but it's worth noting that many companies have been thought overvalued by the metrics of their times, only to generate significant further shareholder value down the road.
Why did Jill Barard, the former CEO of
, get such a steep severance package after she practically ran the company into the ground?
Barad's deal was typical of the kind of handcuffs a top executive can put on a company. I wasn't privy to the discussions, of course, but the sense I get is that she would have made it much more difficult to get rid of her if the board hadn't essentially overpaid her to leave.
A bit of compensation for the mental distress of being branded a failure, I suppose. Just shows that at the top echelons of corporate governance, it's really hard to find a poor CEO who's made to suffer monetarily for that poor performance.
We all know Cisco is overvalued, but the question should be: Is it a house of cards that could fall or implode on itself?
My sense is that it is not, but I'm not a networking reporter and I can't speak on Cisco with absolute authority.
be acquiring a 5% stake in Fergus Falls, Minnesota based electric utility
Otter Tail Power Company
Because he thinks it's a good investment, I would guess. Bill Gates and other very rich people buy big stakes in small companies all the time. Maybe he thinks he knows something big about whatever Otter Tail may be working on. I doubt it has much to do with
. Probably more of an interesting personal investment on his part.
Remember David Tice said
was overvalued at 35. It is now 50, so much for expert opinions!!!!!
Well, there you go. You've certainly debunked the concept of expert opinions. Congratulations. Seriously, that goes to show you that it's extraordinary folly to rely on any one opinion as the catalyst for an investment decision.
If your own due diligence told you that Tice was wrong about Tyco, you were free to bet against him. If not, you shouldn't blame him for offering an opinion. No one's forcing anyone to follow experts blindly. You should always keep your own eyes open and not look entirely through someone else's.
Does it appear as if the initial public offering window will be closed for some time?
It's certainly going to be narrower, to the extent it remains open. Conditions will become more amenable to strong IPOs at some point, but the window may well remain firmly shut for the kind of ill-capitalized, ill-considered outfits that were going public months ago.
You should take a look at columns by
, or look at the site he runs,
(a unit of
Thank you very much for joining us today, Mr. Edwards. It's always a pleasure!
Always a pleasure to join you. Thanks for chatting, and I'll see you at