Cisco stock hits multiyear low

Cisco stock this morning in pre-market has hit a multiyear low breaking below $15/share to $14.93 and the big question for investors is when will the drop stop. The previous low was at about $13.80 in March 2009 and it looks like the stock is on its way to retesting that low, as seen in the chart below. The stock is dragging the Dow down and it appears will remain one of the Dogs of the Dow for the foreseeable future, given the mia culpa by its CEO John Chambers recently in the press. It is my opinion that Cisco's turnaround needs require the same medicine that IBM needed in its day, a Lou Gerstner type CEO. I know, as I left IBM before Gerstner arrived, because I saw that IBM was inflexible and flexibility was needed at the time. It took Lou Gerstner to create that flexibility and kill many sacred cows. The person who created the problems can not turn around the business, as he is usually blinded by his own previous decisions and has unknowingly strong attachments to those decisions made in the past being "right." It's a shame the Board doesn't act swiftly to stop this slow death from playing out. There are many very smart employees at Cisco and the talent pool is very deep. The company needs a transformation and a break from past misguided decisions. Ego has killed many a business. Keeping one's Ego in check takes help from experts and a reverence for self examination. I don't think this CEO has that in him.

Car Czar names: I have several

Who could help the Auto Industry restructure itself and be competitive enough to reinvent itself? I have several names. The first one who comes to mind is on other's lists. His name is Mitt Romney. Mitt knows the Auto Industry, is very smart, has the bench strength to draw from his earlier days with Bain & Co. He would be a good choice and another way for President-Elect Obama to bring former rivals into the tent of his Administration. I could support Mitt as the Car Czar and he would do a great job.

But another name came to me and who could be even more successful than Mitt. His name is Lou Gerstner, formerly CEO of IBM, who was brought into the company in 1993 to save the company and change its culture. He finished his role in Dec. 2002 and did a great job, as evidenced today by IBM's success in the market place. Lou didn't work in the Auto Industry but he does know how to change a company and get it on the right track. He was CEO of RJR Nabisco and most recently was CEO of the Carlyle Group where he retired from in Oct. 2008. He wrote the book, "Who Says Elephants Can't Dance?".