How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 488.02

+0.2%

9:30 AM EST

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To: Al Bearse who started this subject	1/2/2001 8:41:18 PM
From: Bob Davis	Read Replies (2) of 74651

MSFT has been overvalued by the market for the last several years. However, its substantial market declines since the beginning of the year have changed this picture. At its close on December 29nd at $43.37, MSFT is now trading at a price level that is approaching its "Economic Value". MSFT's recent price decline was not entirely due to its ongoing legal problems. Instead it was the result of the stock's relative market overvaluation, which became more extreme around the beginning of this year. Subsequently, MSFT corrected back toward its economic value, in a move that is sometimes described as a "reversion to the mean." Based on an analysis recently published by The Napeague Letter, it appears that MSFT is currently priced by the market in line with its economic value. This analysis includes charts and worksheets that illustrate its current valuation, as well as a more complete explanation of the analysis methods used. Click on the blue "Bob Davis" at the top of this post to find the URL for the Napeague Letter web site. Bob Davis The Napeague Letter

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