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Tuesday, June 14, 2011

What happens to CSCO?

I talked about CSCO in Apr and thought it was a good buy when it was around $17. It is not around $15, a 12% drop of its price. What happened? Nothing really. If anything, it becomes even better a bargain. Remember, CSCO to me is a long term value investment, not a short term trade. As a value stock, I'm really not too much worried about its daily price changes, as long as its fundamentals remain unchanged. As part of the stock market, its share price will inevitably influenced by the overall market sentiment. The stock market has come down for 6 weeks nonstop. With very few exceptions, most of the stocks have also dropped, including good ones. Actually this kind of stock devaluation is great news for value investors. It creates a much better entry point for them to buy the stocks they want at more discounted values. So to me, CSCO is just 12% cheaper to buy, a better stock I want to own more.

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