Regardless of what happens to other "historically overvalued" stocks, MSFT stock is doomed for the foreseeable future, IMO.
If other stocks maintain their p/e, MSFT's troubles and slowing growth, will push down the p/e. One of the reasons why a premium was paid for MSFT, is because it was a "rock" in the stormy sea - "monopoly" and all that. Now that the monopoly is under attack, and growth is slowing - the stock will get killed.
If all tech stocks p/e is to be taken down, that will not spare MSFT either, rather, it will be cut down concurrently.
There simply doesn't appear to be any UPSIDE to owning the stock at this point in time, and that by itself, is a "SELL". Who will buy it here at 70+? I don't see it. Who would sell? I see plenty - if there is little to look forward to over the next year, why not sell? You can always buy it back later (and probably cheaper!) if you are desperate to own it (and if they pick themselves off the floor). Meanwhile, the worry over paying cap gain taxes, goes only so far. As the stock shrinks rapidly, so do those gains. Why sit on dead money? MSFT stock used to be a refuge from a troubled market - but now that refuge has been invaded by very real troubles. I'm afraid it is now a "sell".
I therefore think MSFT stock is doomed for now... and for how long? Hard to say, but surely as long as growth is lagging, and legal problems threaten it massively - it is a no-go.
Just my opinion. However, I am seriously thinking of going massively short MSFT.
Morgan |
