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Technology Stocks : How high will Microsoft fly?
MSFT 478.53-1.0%Dec 12 9:30 AM EST

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To: John Chen who wrote (4743)1/22/1998 4:50:00 PM
From: Gary Yu  Read Replies (1) of 74651
 
John,

Today's price already factored in future 50% growth by lots of people like you. In the near future I don't think 50% is realistic. By First Call estimats, EPS growth is just 20%+. Even if they can maintain 30%+ growth rate, P/E ratio could be different. It's naive to assume stock price can grow at earning growth rate. When growth rate is decresing, the stock price usually grow at much slower rate if it's not decreasing.

Gary
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