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Technology Stocks : How high will Microsoft fly?
MSFT 510.37+1.4%Nov 14 9:30 AM EST

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To: Dennis who wrote (11279)10/12/1998 6:34:00 PM
From: johnd  Read Replies (1) of 74651
 
Dennis,

Regarding your question of whether one must wait for
the resolution of the DOJ suit, here is what one could
be trading off:

The issues you bring-up (DOJ suit) probably is the biggest
cloud over the stock right now. So there is some uncertainity
as to how it will eventually pan out. So one could wait for it
to resolve.

The other approach is to make a reasonable guess that microsoft
will win and invest your dollars now. The reason I, myslef, doing
this later option is (actually staying invested) is because

a) If MSFT did not have the DOJ suit cloud, it may be trading 20%
higher and then it will cost me that additional 20% premium. We
saw evidance of this phenomenon in summer when MSFT won the
appeals court ruling.

b) The trial could take another year to resolve and by that time
the price of the stock may be 150+ due to ever increasing rolling
EPS and increased value of the company.

So I decided on staying invested in MSFT and keep adding on dips.
Once again, who knows, I could be the one to learn from hard
knocks.

johnd
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