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Technology Stocks : MICROSOFT
MSFT 525.79-3.1%3:59 PM EDT
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To: Dan Guinan who wrote (23)10/28/1997 4:57:00 PM
From: Qtrlytrades  Read Replies (1) of 65
 
Dan,

You stated "If Microsoft's stock price doubles 2 1/2 more times, they will be capitalized to 1 trillion dollars"

I don't think the cap rate was at 400 bill. It is currently at 175 billion. So the stock will have to go up 5.7 times its current value.

Further you stated " the stock can double a couple of more times, but my common sense tells me that hell will freeze over before that happens."
If the market maintains the current PE and the company produces slightly slower growth than the last two years(as forecasted) the stock will double by the end of 1998, from 135 today.

If the growth rate of earnings drops to 20% per year on average a market cap of 1 trillion will not be reached until 2005.

If the growth rate of earnings drops to 40% per year on average a market cap of 1 trillion will not be reached until 2002.

Furthermore,
Hell/(Earth ice age) is not due to freeze over until the year 8576.

Of course not everyone in the world(7+ billion people) will have a computer by 2002/2005, But many of us will have 2.

Regardless of how much MSFT earns in the future and how high the stock goes the federal government will always earn more and spend more. You have to realize that the US government profits greatly from the expansion and profitablity of technology. They take their cut of every transaction/computer sold/supplies purchased/consultant hired.

If you doubt growth can continue go back to the population growth and argue that one. Can the earths population grow indevinately?
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