The Light at the End of the Tunnel (or is that a train coming our way?)

How do you sense the turn about? It probably requires a basic understanding of calculus - the most important issue is the first derivative (no I'm not talking about bad investments!) and not the absolute value. For example, Cisco just reported another really bad quarter in the sense that their revenues are nearly 20% under last year, and more or less the same is expected for next year. So how could John Chambers possibly have optimism other than too much Diet Coke in one afternoon? The answer is that the quarter-to-quarter and seasonable behavior is starting to look a lot healthier (the first quarter-to-quarter growth in a year). On top of that both Cisco and Microsoft have done an impressive job of ripping out cost, so if revenues start to rise they are both in a pretty good position to move forward and do body damage to their less sturdy competitors (what normally happens in a downturn is that the strong get stronger).