Risky indeed, then again anything is risky if you overdo it. No one should own more than 5% of their wealth in any one stock name, after all 3 years ago who would have thought Enron or WorldCom would be worthless? However, you have to have risk to do well in the long run. That is the nature of stocks. This is among the names one should think about for the risky part of their portfolio. You have to be patient or you can take a little time and wait for it. Problem is if you wait too long, your downside risk won't compensate for the upside you could miss on a risky name such as this. As for the innovation, that is the problem. I remember this talk back in the early 90s, everyone thought PCs had pretty much run their course, just expensive toys for rich people and tools for a select few in the corporate world and in education and research. No one could have imagined the network and internet and how they made PCs what they are to our lives now. Trying to "see" or "find" innovation is a losing battle, you just see it or find it until its already developed. No doubt CSCO has a problem with lack of infrastructure spending, but that is only temporary. Anyone that has watched the cycles of high tech, especially Silicon Valley, knows its boom or bust and bust would definitely characterize it right now. However, those booms are amazing and develop like lightning. I was living in the Bay Area starting in 93 and people there then didn't see the boom coming and didn't acknowledge how big it became until it was almost over around the start of 2000. The boom mentality and the craziness with it really didn't catch on with most people until about 1998, yet history shows about 92 or 93 it really did get going. That is why I hold my view of CSCO and a lot of high tech. You may not see the innovation right now and they may not necessarily be a big player in the next boom, but you really can't say who will be. I put some faith in them and Sun and others because I know they are technical and development accumulators. Their assembled talent is nothing short of amazing, you could go through IBM and assemble its top 10,000 people in terms of talent and they would only resemble what kinds of specialized talent that CSCO has inside its businesses. That is what you are buying with a stock like CSCO right now, not earnings over the next year. If you want stable earnings and easy valuations then buy a consumer stock or banking stock, high tech is definitely not for you. Myself I keep myself very diversified and have lots of stocks from the basic such as casino stocks and transportation all the way up to very risky high tech and emerging markets investments, even a few shots at currency markets from time to time. It keeps things interesting and gives me a lot of safety should one thing fall. I have easily beaten the market this year though, I am only down 5% so far even though some things I have held have been pretty ugly.