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Barton Biggs sees opportunity in equities, particularly big-cap techs. They are "way too cheap,...

Barton Biggs sees opportunity in equities, particularly big-cap techs. They are "way too cheap, trading almost like value stocks." He's cautious towards financials, seeing the possibility of additional write-downs as home prices continue to fall.
Comments (13)
  • He'll be right when sanity returns to the market, if it ever does.
    7 Jun 2011, 04:45 PM Reply Like
  • People who say big cap tech is cheap do not understand the current state of the technology business. It's cheaper than ever to start a tech business, innovate, and steal market share and talent from the big, slow players in almost any market. There is no moat around most of these companies anymore. They have to run like crazy just to keep what they have. Despite superficial "earnings growth" at some of these companies, most of them do not have good long term growth prospects. The exception, of course, is Apple. But Apple's valuation already reflects it's much stronger market position. The one company with tremendous unlocked potential is Microsoft. It is a deep value play with strong franchises in several areas and huge assets with no liabilities, but it needs some things to change to unlock that value.
    7 Jun 2011, 04:57 PM Reply Like
  • So by your opening sentence you are stating the Barton Biggs does not understand the current state of the technology business and that you do. I'm not sure how to test that for validity but on the surface I am not comfortable accepting it as fact. No offense intended.
    7 Jun 2011, 05:02 PM Reply Like
  • That's great Chris. So what you're saying is you have folks standing around just waiting to hand you $5 billion for a fab and you'll soon be in business to go up against Intel? How do you plan to assemble the vast engineering talent that you'll need to go up against them? Advertise job listings on craigslist by the tens of thousands?

     

    You're a Mad Hatter - you just don't know it yet.

     

    P.s. You'll actually need about four or so of those fabs to have the scale to compete with Intel, but I greatly oversimplified your task, which is still daunting as simplified.
    8 Jun 2011, 02:06 AM Reply Like
  • Most analysts and stock commentators do not know the underlying businesses they cover. This is especially true of people like Biggs who pretend to cover all sectors of the market and make "macro" calls. Technology is my business. I am founder and COO of a technology company. I speak with tech founders, executives, venture and angel investors every day. That is what I do. Biggs probably spends very little time doing this. He is looking at financial and market data and maybe speaks with a few of his contacts at big cap tech companies, who of course tell him their stocks are undervalued. What else are they going to say? I'm not trying to say I'm smarter or a better overall investor than Biggs, though I think I actually have generated better returns than he has over the time frame that I've been following him.
    7 Jun 2011, 05:15 PM Reply Like
  • So now you are saying Barton Biggs does not know the underlying businesses of which he is speaking . I don't know you but you seem awfully certain you know Barton Biggs. I wish you well.
    7 Jun 2011, 05:26 PM Reply Like
  • >>I actually have generated better returns than he has over the time frame that I've been following him.

     

    I hazard a guess that this is a very short period of time in relative terms. Barton Biggs has been doing this for a very long time. Judging from your picture, I would say probably longer than you have been alive.

     

    Being founder and COO of a technology company means virtually nothing these days, As you say yourself, "It's cheaper than ever to start a tech business".

     

    So, how big is your tech business, Chief, so that we can get some idea of the size of pedestal you have installed yourself on?
    7 Jun 2011, 06:24 PM Reply Like
  • How naive you are if you think people who are famous and often on television must be more qualified to give investment advice and you think that you can judge a person's investment skill by a photo head shot. Some of the worst investors are the most famous for giving investment advice. I feel sorry for you that you are so ignorant as not see the most obvious facts in front of your eyes. I have no reason to even say anything at all except that I think it's sad so many people are buying these alleged "great value" big cap tech stocks or have been holding them for many years in the naive hope that they will some day return to glory because some commentator told them it will happen. It's really pathetic. My account went up in value every year from 1994 to 2011. I'm not a huge investment manager nor have I tried to be, but beating 99% of investment managers over the long term is actually not even difficult. It's even easier with macro market commentators. Most of them can't even come close to keeping up with the market, and they especially get killed when the market declines as it has quite severely twice in the past 10 years. If they work for a big investment house, they generally don't get paid to be extremely bearish on anything. As for being a senior citizen making people better investors, it's not true at all. Data shows that people in their late 30's and early 40's are the best investors on average. So you're wrong again. Get used to it.
    8 Jun 2011, 12:39 AM Reply Like
  • Your profile indicates only one company that you have founded and COO'ed that remotely resembles a technology company, caplink.com. Based on what I see, I first question that you could even call that a pure technology play and second, I want to point out that you still have a "beta" flag on it. Which means of course, you aren't finished building it.

     

    With those credentials, you still want to position yourself as more saavy about the field than Barton Biggs. I am sorry, but my friendliest advice is that you should consider your words more carefully before you make a fool of yourself.
    7 Jun 2011, 06:23 PM Reply Like
  • I doubt you even would understand what a technology company is from your comments. I would pay more attention to making a fool of yourself than worrying about other people. The comments speak for themselves. As for the facts, they're lined up against Mr. Biggs. Recent analysis shows that the newsletter and stock pickers with the worst long term track records are the most bullish right now on these large cap tech "value" stocks. Those with the best long term track records are not bullish or even bearish on these stocks. Check Mark Hulbert's research for further details.
    8 Jun 2011, 12:42 AM Reply Like
  • Ah, earth to Mr. Biggs.
    ARE YOU FREAKING CRAZY?
    If your looking to sell out while the "pump and dumper" scam is in full tilt{cnbc}etc...Well shame on you and shame on anyone foolish enough to listen to you now.
    Risk reward is clearly down, today's close was a nightmare.Waterfall event imminent!
    Jerry
    7 Jun 2011, 06:42 PM Reply Like
  • I am excited about Cisco making a rebound for the following reasons,
    1. Weakness in how the competition steals market share
    2. Focusing on the hottest selling and best loved products
    3. A change in the way the products are being positioned

     

    Cisco lost their way in 2008, with the initial deployment of the Nexus line. John Chamber's as CEO of Cisco had successful lead his company to innovate and create one of the best selling data center switches of all times, the 6500 series switch. John Chambers was responsible for the successful acquisition and integration of over 100 companies. In 2008, the vision was for Cisco to become the next version of what IBM was in the 70's and 80s.

     

    This was done with a massive server/storage play, the Nexus switch was introduced to tie the storage networks, which up until them had traditionally been separate on their own fiber networks. These would all be integrated under one banner, and it would be Cisco's that was the vision, here is where it came up short.

     

    In 2008 Juniper had just finished integrating Netscreen into their company, and had just finished their first line of switches with an aggressive foray into Cisco's market share. Juniper's experience in the carrier market with their M-series router, had earned them a reputation for reliability, Juniper was eager to execute on this while grabbing Cisco's Market share in the enterprise.

     

    This was the stage for what has played out over the past 3 years.

     

    When Cisco introduced the Nexus switches, to merge data and storage, and at the same integrate tightly with their UCS servers. This was a complete paradigm shift from a company that was used to selling the primarily the network infrastructure.

     

    Cisco meet w/ customers and channel resellers to discuss the new paradigm. In affect the mis-step was, that Cisco would walk into customers ready willing and able to execute on network purchase order's for the hottest selling switch on the planet the 6500 series with a tightly integrated firewall the FWSM, and instead attempt to sell them on simultaneously replacing their SAN for storage and their Servers.

     

    The customers network team's scratched their heads, this was like Honda taking throngs of customer's looking for an Accord and introducing the all new, "not an Accord". To replace the server and storage side would require testing and integration from multiple departments.

     

    During this time while the customer's were scratching there heads and evaluating this new paradigm and testing the brand new technology, Juniper hot off the heals of integrating the #1 firewall seller on the planet walked in with a firewall they customers were likely already buying and reputation for reliability from their success in the carrier market. Juniper walked in and had a proposition to sell switches, and Netscreen Firewalls. These required no cross department buy off and no testing.

     

    Cisco couldn't complete a Nexus/UCS evaluation in the time it took Juniper to make a sale.

     

    This set the stage for Juniper to start making their own mis-steps, they took the hottest selling firewall on the planet with its own OS and GUI, and killed it to make their SRX firewalls. This enraged the Netscreen talent which left to found Palo Alto Networks.

     

    Despite Juniper's mis-step and there EX switches which had some issues and were released slightly before they were ready for prime time Juniper was still able to sell their "Not a netscreen" firewall, and their not quite ready switches, while Cisco was still demoing their "Not a 6500" switch and complete new paradigm.

     

    Fast forward to the present, Cisco has lost a small market share to Juniper 42,000M in sales vs 4,200m. Juniper has lost their firewall talent, Netscreen was number 1 in the world by sales, and now the Netscreen people are Palo Alto Networks.

     

    Cisco has re-emphasized the 6500 series, and are selling the Nexus switches w/o the emphasis on the integration, they are priced competitely for data uses alone, and the customers can turn on the other features with additional modules or licenses.

     

    Juniper has lost the sharpness on their sword to penetrate new accounts, and Cisco has been sharpening theirs.

     

    Disclosure Long on CSCO via Calls.
    8 Jun 2011, 04:00 PM Reply Like
  • Wow, finally an explanation for how CSCO lost their way, and how they might get their mojo back. Great comment.
    14 Jun 2011, 12:21 AM Reply Like
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