How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 484.52

+1.6%

10:57 AM EST

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To: Daniel Schuh who wrote (10187)	8/19/1998 1:09:00 PM
From: Bearded One	Read Replies (5) of 74651

Actually, Price/Earnings, Cash Flow, market share, # of hits per day, are all approximations. There are only three ways to make money on ownership of any financial instrument: 1) Income derived from ownership (dividends, stock buybacks) 2) Selling it to someone else 3) Putting it up as collateral for a loan (margin) Ultimately #2 and #3 are mostly derived from #1, though there is also a "prestige" syndrome sometimes. Consider: Suppose that Microsoft stated publically that it would never ever pay dividends, nor would it ever buy back its stock. What would happen to the price? So earnings and cash flow and what not are just help in guessing how much is left at the end of the day to distribute to shareholders. I don't think that Microsoft has or will ever have 300 billion dollars of distributable assets. Thus, the stock in my view is overvalued, and in the 'Mark McGuire baseball card' category.

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