John,
I am a long term investor of Microsoft, and add additional 25% of my previous holdings every year . I am not happier if MSFT dips to $120, and I do not think that will happen.
Talking about PE, I do not agree that Microsoft's PE should never be over 72, and no one set that rule in the market. If you say INTEL's PE will not be over 40 in the near future, I tend to agree, because INTEL's business model is quite different than that of
Microsoft. Besides higher R&D expense, the cost of new fabs are a high burden to INTEL, and AMD and Cyrix are always threats to INTEL's market share. While Microsoft is completely different. If the sale person did not tell me my computer
is installed with a K6, hen I will probably never know that a K6 is working in my PC.
However, if I am a long term user of Win95, most likely I will continue to use Win98, and Win2000, because I have been with the application of the software , and
I do not like to learn new application software with my valuable time if Window can
serve my purpose pretty well. What I am trying to say here is People tend to be more loyal to the software than the CPUs. That is another thing which proved Microsoft and Intel's business models are different, and that is why Microsoft should have a higher PE and INTEL should not. |
