How Joe Kernen Destroyed Tech

Did you get an invite to the pity party? Cisco (Nasdaq: CSCO  ) CEO John Chambers is throwing one, and apparently, all of Silicon Valley is going.

During a Wednesday afternoon conference call with analysts to discuss his company's solid but unspectacular second-quarter earnings, Chambers whined about TV news coverage of the tech industry:

I think we are actually talking ourselves into this [economic] slowdown. Over the last three or four months, I felt pretty good about business until I got on the treadmill -- and then I quit early because of the pessimism that exists in the market.

So let me get this straight. Squawk Box is responsible for the so-called tech meltdown? Chambers can't be serious, right?

Wrong. Just ask Intel (Nasdaq: INTC  ) CEO Paul Otellini. Quoting from his remarks in the chipmaker's fourth-quarter conference call:

I have the same caution that I think everybody in America who watches CNBC has today. You hear all of the pundits saying that the world is going to go to a trash basket and you worry. It may be a self-fulfilling prophecy.

Bad CNBC!

You'd think I'd be able to sympathize having been on the business end of a grilling on Squawk Box in June. But really, fellas ... you're giving CNBC way too much credit.

It takes a village of cynics
The ugly truth is that many of today's top tech stocks were burdened with unreasonably high expectations -- including, apparently, Cisco. CNBC is to blame for that? I can't see how. But if it is, then:

Steve Jobs should stick needles in a Joe Kernen voodoo doll, because Apple (Nasdaq: AAPL  ) guided lower than Wall Street expected for its second quarter.

Bad CNBC!

Larry and Sergey should post a Becky Quick blooper reel on YouTube, because analysts were once again wrong about Google (Nasdaq: GOOG  ) .

Bad CNBC!

Carl Quintanilla should be forced to work the midnight shift in the company data center because VMware's (Nasdaq: VMW  ) revenue didn't rise faster than a Chia Pet on Miracle-Gro.

Bad CNBC!

Here's my point. Had we investors all been just a little more cynical about valuations -- some of which really were sky-high -- then we wouldn't be obsessing over a tech meltdown right now.

Your attention please
Let's put this in perspective. Chambers told analysts that he expects Cisco to grow its top line by 10% in its fiscal third quarter. They didn't much like that. Here's why:

Fiscal Q3

Year-Over-Year Growth

2008 (est.)

10%

2007

21.1%

2006

18.3%

2005

10.1%

Source: Capital IQ, a division of Standard & Poor's.

See what's happening here? Cisco's growth rate was accelerating. Now, suddenly, it isn't. Analysts are supposed to be happy about that? Of course not.

Bad Cisco!

Here's my advice, Mr. Chambers: Get over it. If you really think business is great, and that the tech collapse is purely in our heads, then get back on that treadmill, call your broker, and do something you haven't done in at least four years -- buy shares of Cisco on the open market.

Now that would be worth covering on CNBC.


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