Sure, no company will grow forever, and no exception for Microsoft. As long as
Microsoft is still in the frontier of the the most important industry of this century, i.e the IT industry, It will continue its growth fiercely. As to when Microsoft will slow its growth, well , who cares, I will let that to my grand sons. At least , in my generation , I do not have to worry about the growth of Microsoft, because the IT industry is just in its infancy, and I do not have a grand son yet.
As to the valuation, well, why do you think a PE of 20 is fair ? You have your definition, and I have mine, and who is right ? Microsoft may be under value at this price, based on someone else's opinion. The economic environment of today is different than that of yesterday, and 40 years ago we do not even have an IT industry, and the telecommunication industry was very primitive at that time, so the way to value a stock is different .
As to Asia's economy, well , most of the countries over there will start recover in the second half of 1999, and will be fully recovered in the second half of 2000 or the first half of 2001. So, what are you worry about ?
Yes , sooner or later , people will start to talk PE again, that will be year 2050, and at that time , People will say, well, Microsoft's PE of 500 is too high , the fair PE should
be 250, then who cares!!!!!!!!!!!!!!
In year 1999, I will be worry if KO had a PE of 70, but for these Internet stocks , or Microsoft, the industrial stars of tomorrow, a PE of 70 in 1999 is just too low.
If Yahoo can hold a PE of 1000, well a PE of 100 for Microsoft is not fair at all, it is too low !!!!!!!!!!!!!!!!!!!!! |
