James:
Actually 1 trillion is just a number just like 170 billion.
So I am not concerned about that.
The key is whether the company will see growth and profits.
If you believe in grwoth and profits, then people will keep buying.
So if profits are overstated 26%, MSFT may decline 26%. That
is what we have to take.
Why would magellan and for that matter most mutual funds keep MSFT
core holdings at 10 of top holdings?
If people bail out of mutual funds, and there is redemption, you
could see a decline, otherwise the appeal is getting stronger and
stronger for MSFT.
There is always risk in anything including orange county bonds
and risk in stocks are much higher and so are returns.
Thanks to James and Craig for posting potential pitfalls and danger
with MSFT.
But I trust myself that we are OK for the next 5 yrs and we will see
3x to 4x valuation increase over that time.
We will have up days and down day, but the aging baby boomers will
keep pouring money into stock market mutual funds and those funds
will keep buying MSFT as it is the core holding.
Some of the premium you pay is for the 10Billion in cash, the star
studded team running it, the consistant track record, the monopolistic
business with tought barrier for entry, and future potential with
Internet, NT and Windows CE.
Microsoft is now an international brand name, like Coke. Why buy
Netscape at 120PE when you can get this at 58PE. Why buy ORCL at
45 PE when you can buy this at slightly over, 58PE. |
