Sunday, August 15, 2010

Cisco Systems' John Chambers joins the “Unusual Uncertainty” choir.

Last week, Cisco Systems (US: CSCO), the world’s largest maker of networking equipment, reported quarterly results and its stock dropped 10 %. During the earning conference call with investors, CEO John Chambers reiterated a view recently presented by Federal Reserve chairman Ben Bernanke - he warned of “unusual uncertainty” in the economy.

My first meeting with Mr. Chambers was in 1994 – just three guys sitting in a small conference room at JP Morgan (Chambers had not yet assumed the role of CEO). Since then, I have listened to him on conference calls, attended his presentations at investor events, and spoke with him at a business function at the Dead Sea outside of Amman, Jordan in 2004. He is the leading “perma-bull“ in an industry populated with extreme optimists. While he may be signaling a momentary “speed bump”, he is also known for choosing his words very carefully. Cisco is more than a technology bellwether; it is a global leader in a significant industry. Investors should not take his comments lightly.

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