Here we go again. Cisco Systems on Tuesday announced its second $3bn purchase in as many weeks, agreeing to buy Starent Networks, a maker of mobile telecoms equipment. With $19bn of net cash left sitting on Cisco’s balance sheet after these two purchases, further deals seem likely. But investors should be wary of endorsing a new buying spree.

Chief executive John Chambers has form on empire building. Cisco became the largest maker of networking equipment – the technology essential for computers to talk to each other – in part by relentlessly buying up other companies. After taking the helm in 1995 he had snapped up more than 40 companies by the end of 1999, a run that helped Cisco briefly to become the world’s largest company the following year, with a market capitalisation above $550bn.