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Pastimes : It All Depends on DOJ vs MSFT

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To: PMS Witch who wrote (5)2/12/2001 12:58:07 PM
From: David Freidenberg   of 61
 
“This case has caused some serious damage as investors realize that when companies prosper, they become targets. The uncertainty and arbitrariness of these cases makes risk assessment difficult, and risk assessment is one of the foundation stones upon which investment decisions are built.”

Nicely stated. The market continually assesses downside risk vs the upside potential of future earnings growth in order to appraise the value of individual stocks. In addition, consider the pall cast over MSFT’s ability to produce future earnings growth, and there goes the other cornerstone of investing. Individual stock prices, like home prices, are also determined by comparison. If the nicest house on the block suddenly loses a large percentage of it’s value, then what happens to the prices of other houses on the block? These are all pertinent points, but, in order to truly appreciate the magnitude of the profoundly negative economic effect of the DOJ decision, we'll need to explore the degree to which MSFT contributed to the underpinnings of the technology industry.
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