Music Download (AAPL, ROXI, RNWK, AOL, MSFT, AMZN) Message Board

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Technology Stocks : Music Download (AAPL, ROXI, RNWK, AOL, MSFT, AMZN)

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To: Mason Barge who started this subject	4/22/2004 10:52:35 PM
From: johnd	of 50

Ben Graham formula puts MSFT at 56. Ben Graham, the great investor said a stock should trade at a PE = 8.6 + 2* (growth rate). In microsoft's case we know the growth rate for 2Q in a row is 17%. Let us plug in PE = 8.6 + (2 * 17) => 42.6 is the right PE. Price of stock = Earnings * Graham PE MSFT Price = 1.32 * 42.6 MSFT = 56 ----------------------------- Considering that investors in Microsoft know that either a big one time dividend or more likely a doubling of dividend or a combination is coming ahead in 3-6 months, wall street institutions likely to keep buying here. Note that it is only 6 months max to get the regular dividend so if they double regular dividend to .32 (1.25%) then because that comes in 6 months, the effect is 2.5% compared to cash in bank for 6 months. So I see MSFT a) popping to 29 - 30 tomorrow and basically doubling in 3- 6 months. Buying here is an investment you may cherish for the rest of your life.

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