>You're asking for an awful lot now Gerry :-)
All I'm asking is for you to explain your methodology.
Valuation models are only as good as the assumptions that underpin them.
>remember that MSFT does not
>have to grow their market cap at 40% per year, that is your job as the investor.
I'm not asking Microsoft to do anything. All I'm saying is that to justfy my paying 40 times earnings, in a company like Microsoft, I want to see 40 percent earnings growth per year.
>NSCP is a perfect example of this. It's
>market cap is absolutely ridiculous, but some investors are willing to support it and it
>does not effect its abiltiy to grow earings.
Netscape and Microsoft are not comparable in this regard. Netscape is a start up with 100 percent plus earnings growth per year. Microsoft is a much more mature company, at a totally different point in its coporate life span.
>(all of the lawyers in the New York area are still using
>Wordperfect 5.0 for DOS, is that what you use :-)?
You are essentially correct.
Lawyers are hopelessly retro when it comes to technology. Where I work, we just upgraded to a network with heavy use of proprietary software from Lotus and Novell, all running on Windows 3.11 -- exactly 2 generations behind the state of the art. I am supposed to be the "computer guru" in my office (HA! HA! HA! -- what a joke!). Most of the others don't want to touch computers or Windows or anything technical, and those that do have a devil of a time.
>Gerry, you are not lookng at the numbers, you are listening to the trade press.
The point is: it did not live up to expectations.
>Gerry, you were wrong from the start with this one, and several people have
>pointed it out to you. What MSFT is doing is creating demand for their core
>products. Is it working? Look at how fast demand is ramping up for Windows NT
>server, Windows 95, Front Page etc. This shouldn't be so hard to understand,
>Lotus and NSCP are doing the same thing, and succeeding.
Sorry, I stand by my earlier statements. Microsoft is at the point where having too much money becomes a weakness rather than a strength.
The biggest mistake Microsoft ever made was to give away their browser. They lose the chance to earn real money making a product customers will pay for, and now, as it turns out, their market share gains are nothing to write home about. Just ask Darth Va..., err, I mean Steve Ballmer, who actually admitted this in the real audio interview I pointed to a few posts back.
Is NT ramping up as fast as Microsoft wants? Will it meet Wall Street's sky-high expectations? Show me the figures.
And, Netscape and Lotus are NOT doing the same thing as Microsoft. They can't afford to.
>Gerry you exagerate to no end. Do you remember when I explained that MSFT's
>interest on thier bank accounts "alone" throw off enough money to cover your so
>called "black holes"?
How do you know this? Where in their financials do they break out the losses for IE and MSN?
Seems like every time they lose money on something, they just call it "research and development."
>MSN is not a billion dollar sink hole, they made a multimillion >dollar mistake.
Well, coming from you, that's quite something -- an admission that Microsoft has made a mistake.
Anyway, my math is as follows:
$400 million dollar loss in 1996 per Ballmer's interview admission
$600 million spread over the next two or three years. Ballmer says the losses are going to be declining, but they are still going to be big. Until you can give us some better figures, I think $600 million over three years is as reasonable a projection as anyone can come up with on this.
$400 million + 600 million = $1 billion. |
