Cisco Effect, Intel Effect, and Recession with a big "R"!

One of those "never posted" entries back in October was to be "the Cisco effect". Cisco had a Q4 2007 earnings announcement that blew away the estimates. They had grown their earnings by something like 25% -- an incredible number for a company of their size. But hidden in the earnings announcement was a foreboding warning of a slowdown in purchase orders from large banking customers. The next day, the market slammed Cisco stock to the tune of 10%, and the market as a whole got dragged down with it. Just last week, Intel dropped 12% in a day on weak earnings and pulled down the entire market. Professional paid-for indicators went negative 2 weeks ago -- suggesting that everyone pulled out of stocks entirely. Not bad advice in retrospect! We are clearly in the midst of a Recession -- perhaps the first of 2-3 quarters. The only thing that hasn't hit yet are the type of layoffs that grow unemployment to the 6% level. Investment opportunity for 2008? Cheap foreclosure real estate! Sell your stocks and look for a house on the cheap if you can afford it...