The 140 prediction...
I don't think Microsoft shares are worth 140 right now. I see the share price fluctuating above and below what I consider fair value and I'm making the guess (and it's just a guess) that if the share price gets all the way down to 90ish, which is too low, when the price recovers it'll continue climbing past fair value and reach silly heights too. I expect the spring that gets wound up the most will release the most too.
Perhaps I should clarify my position: If Microsoft doesn't get cheap, I won't be buying. If we don't see unsustainably low prices, it's unlikely we'll see optimistically high ones either. I'm not about to attempt trading a flat stock.
You are correct about a high P/E Microsoft correcting sharply if the future begins looking less rosy. In fact, it's been a while since we've seen shareholders stampeeding, and I expect that when they do, it'll be far worse than anything we could imagine in our wildest halucinations. (Notice: I said 'when' and not 'if') Did you not post that you too had sufficient cash to exploit opportunities as they arrive?
For now, I'll continue to hold my nose and hold my Microsoft. I don't like these times we're in, but again, I have no choice. Like most people, I worry more than I talk, and I talk more than I act.
Thank-you for contributing your observations. As usual, they contain much clear thinking and are very worth reading.
Cheers, PW. |
