History...
Yes, history does seem to repeat; hence, the value of its study. But let's not lose track of a decade's worth of change. In 1990, Microsoft was a nimble predator in a well populated hunting ground: Lotus, IBM, Borland, WordPerfect, WordStar, Apple... Today, Microsoft is considerably larger than a decade ago, and more weight makes moving quickly difficult. Many perceive Microsoft as taking the role of prey instead of hunter, with a number of smaller and nimble competitors nipping at the heels. And we still have the legal/political hyenas circling too.
However, lets not forget that this is a highly successful company employing a vast workforce of incredibly well motivated and skilled people contributing their efforts in management, creative, and supportive positions. This company quickly establishes itself as a leader in every business it enters. And it has the resources to meet future challenges.
And above all, it is trading at or near its average PE. Today, at these prices, Microsoft is no longer an overpriced stock, although maybe not the cheapest it's ever been.
Cheers, PW.
P.S. When Microsoft steps in a pot-hole, it staggers off-balance for about 18 months before regaining its composure. We've been through 12, with 6 left to go. Be patient. |
