You are wrong! I know finance and accounting better than most on this board. Now, first of all, valuation within a sector? Come on, which planet are you on? Does it mean, it is ok for a sector trading at ten times of premium to its growth rate while others are allowed to trade at 15 times? Get a clue. The best and the leader in each sector has always been trading at premium to its peers. I own Lucent, but Lucent had a problem and it will take another quarter to attract investors back in. Cisco on the other hand has never made a strategic mistake for years. If you stil argue that Cisco should trade similar to Lucent, NT, Newbridge, Fastcom (chapter 11), Alcatel, and Pairgain, then I have nothing more to say. When Lucent regains its reputation, Lucent will trade higher. Ever learned the efficient market theory in school?
PV= value of firm = discounted (TR-TC).... now go back school and learn some real stuff.
Valuation should be taken against a whole lot of companies, including Old economy stock like PFE, biotech giant like AMGN and DNA, let alone your favorite new econmy stocks like ORCL, SUNW and NT. To sigle out Cisco right before its earning is a really low blow which I though a quality publication like Barron's would never do. It is not just a messenger, it sometimes is a market maker. In a period that is full of self-indulgent talking heads, a poison pen can be even worse. Where was Barron's on the week of March 15 when the stocks hit the all time hi? Barron's is just like CNBC--all of suddend they are more interested in making news than reporting news.