How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 480.82

+0.6%

Dec 4 3:59 PM EST

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To: werefrog who wrote (6160)	4/25/1998 7:22:00 AM
From: Moominoid	Read Replies (3) of 74651

Has not msft gone up and split every 2 or 3 years? And with GM & Ford going to use their software early next year in many models, which many analyst are saying will be bigger than the pc industry, evenually a computer in every vechicle off the assembly line, the future of msft could still be awesome. You might make more money in the short term off some stocks, but which one's, the Internet stocks? My policy is always hold some msft & I do play a few other stocks for the fun of it, but msft is the sure thing stock. Jim - Dallas I agree that MSFT can grow at least as fast as the IT industry as a whole and maybe slightly faster for a little longer. But their profit growth rate is declining and analysts forecast further decline (together with almost every other company) in the next year or two. At the same time the PE has been rising from around 45 or so to 55-60 or so over the last few months. There's been no change in interest rates so that is basically unsustainable. As to whether MSFT is worth a PE of 45 or not that's another issue that is arguable depending on your assumptions. I think in the long-term not but in the short-run maybe yes. All you guys will probably laugh but my pricing model gives MSFT an equilibrium price of $25. Using this model stocks such as Sony and IBM aren't far from fair value. A bunch of indicators show that an at least minor general correction is beginning to get underway so I think my short MSFT position won't harm me in the short-run. David Stern

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