ZF Capital

WITH CISCO SYSTEMS (CSCO) down some 70% from its all-time high, analysts are falling all over themselves to divine the next move for the beleaguered stock. At $19 a share and a $140 billion market cap, it isn’t exactly cheap. Some think Cisco is attractive at current levels. Others think it’s a buy way down in the low teens, and still others wouldn’t touch it until the single digits. As always, two sides make a market, and nobody knows the future.

Like my well-pedigreed colleagues, I too have a price at which I’d like to buy Cisco: $81.82 a share. In fact, I would love Cisco at $81.82, its all-time high. I’d adore it. I’d be all over it.

Seem strange? Perhaps. After all, if Cisco ever got back up to the high it reached last March, plenty of people — especially those sitting on losing positions — would sell, anxious to recoup their losses or protect profits before the stock took another dive. It’s what I hear when I talk to prospective clients about reallocating some of their assets away from tech. Everyone is waiting for a bounce.

That thinking is understandable, but flawed: The truth is that if the stock ever did rebound back to its old highs, it would be a signal to increase, not decrease, your exposure. It’s a question of timing, and from baseball cards to Brocade Communications (BRCD), trading is all in the timing. (more…)