) were so deeply unimpressed by the company's latest quarterly
results that the stock lost more than 7% of its value Thursday,
closing at $24.47.
Among the deeply unimpressive facts were the numbers on the
company's performance in three countries that had been among the
world's hottest investment targets for the past 10 years. Business
in Brazil and Russia was flat, and in China it was down 6%, CEO
John Chambers said on the Cisco earnings call. Sales in the entire
Asia-Pacific region overall were down 3%.
Moreover, positive signs of growth in Japan and elsewhere aren't
likely to give the company much of a boost in the short term. That
was the apparent reasoning behind the company's plan to shrink its
workforce by 5%: "The necessity of a 5% reduction in force is
likely the key indication that a macro recovery in key regions like
Japan is not in the near-term outlook,"
The bleak figures above, however, mask better news in the numbers:
Overall, Cisco's sales in emerging markets were up 8%. So, some or
all of the darlings of the past decade of investing -- known as the
BRICs, for Brazil, Russia, India and China -- may see their growth
slow for a while. But they'll be replaced by other new names --
with the addition of some old stalwarts like the US and even parts
A newly-released survey of 400 venture capital, private equity, and
growth equity investors around the world shows growing confidence
in the US as a place to invest money. In fact, it found investing
sentiment currently favoring the US over all other regions of the
The survey, conducted by Deloitte & Touche LLP and the National
Venture Capital Association (NVCA), asked investors to
rank their confidence
in each nation's or region's investment potential on a scale of 1
to 5, with 5 being the top possible score.
You don't have to be a big-time venture capitalist to see the way
they're thinking. The signs of cherry-picking are clear throughout.
Confidence in Germany and Japan are growing. But there's relatively
less confidence in France and China. Israel is looking fairly
strong. But nobody's even asking about Egypt, once seen as a
fast-growing economy, but now embroiled in civil unrest.
Overall, the US scored 4 out of a possible 5 in
Oddly, American investors were not necessarily as upbeat as their
foreign counterparts. Although American confidence in America came
in close to the overall score, it showed a 3% decline from the
previous year's results, while China recorded a 37% increase in
confidence in America, and Germany a 28% increase.
Among emerging regions, only Southeast Asia saw increased
confidence over last year's survey, with a score of 3.42 out of 5.
Declines were recorded for Brazil, China and India, among others.
Overall, confidence in US investment opportunities increased 4%
over the results of last year's survey, while Brazil and China were
both down 6%, and Latin America was down 5%.
The short message is that "the US has its challenges," but "our
issues are familiar and addressable," said Mark Heesen, president
of the NVCA.
It also means that every company -- and every global stock investor
-- is going to have to judge which way the economic winds are
) is widely considered to be gearing up to release a cheaper
iPhone, primarily to shore up its international sales. In its most
recent results, affluent consumers in Japan gave the company its
sole boost in sales abroad.
Sales were down
year-over-year in Europe and China, and flat in the Asia-Pacific
region as a whole.
A cheaper iPhone is not exactly a surefire win, since every other
mobile company already has contenders in the field, including
homegrown brands in China.
As far as those big-bucks venture capitalists are concerned, global
investing is still about technology, and primarily about
Internet-related technologies. In the Deloitte survey, the five
top-rated sectors in terms of investor confidence were mobile;
cloud computing and related software services; enterprise software;
consumer software, and new media and social media.
It's important to note that investors are not moving on from China
or Brazil because those nations are failing economically, but
because they have succeeded in raising the living standards of vast
numbers of their citizens.
And in the end, the biggest beneficiary might be the United States.
New York Times
the BRIC nations' strategy
worked exactly as US investors had hoped it would. It created new
markets for American products abroad, while workers in the BRIC
nations manufactured the products that consumers in the developed
world wanted to buy.
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