If you think Microsoft will hav another split by the end of this year ( Just like what Tflon said in his post), then Year 2001, $125 leap is a good buy now, because Microsoft have to hit at least $150 by Feb of 2000 before it will split the stock. So, by Jan 2000, you are probably $25 in money and stock still have one year to appreciate befor expiration. So, why it is not a right time to buy leap now ? I did not see it. The stock may pull back a little at this moment , or continue to shoot up in the next couple of weeks, it is everyone's guess. However , in the current environment , I see more chance of going up.
The big environment:
1) Economy is still strong.
2)Asia will recover in the second half of the year and will help the profit of US hi tech companies.
3) Low inflation , so stable rate.
4) Big money from 401k, retirement fund ..., from overseas dump into the market month after month.
The environment for Microsoft:
1) There will be a settlement between Microsoft and the government, and at the early stage of the negotiation , the government just want to push to the maximum, and may compromise in the middle, it is just a technique of negotiation
2) New product cycles.
3) Blow our earning quarter after quarter
4) Full speed in e-commerce business
So, I do not see the reason that now is a bad time to buy Microsoft , either stock or leap. |
