My theory on when to buy Cisco stock and when to sell

When Cisco pays cash for an acquisition, in my opinion it's probably time to sell Cisco stock.

Personally, I'm now convinced that owners of the companies Cisco acquires are highly informed about the future direction of Cisco stock. And why do I believe that? Well, it's my opinion that when the owners of a company Cisco is acquiring accept only cash, their demonstrating they have little faith in Cisco's stock appreciating. I mean, investment bankers are advising the owners of these acquired companies, and heck, investment bankers are usually very "plugged in" as to the merits of when to buy and when to sell Cisco stock. For example, when Cisco used its common stock to buy Linksys and Pure Digital, the owners of the selling companies did very well by accepting Cisco stock for their shares. Thus the creation of my thesis: Purchase Cisco stock when Cisco's using its common stock to make acquisitions. Consider selling Cisco stock when Cisco's using its cash to make acquisitions!

Cisco stock chart for the last 10 years:


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What's your take, am I totally whacked?

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