<<Well, what is different between this year and last year ?>>
ed, the whole market is different. That's what you don't get. The high p/e game is not being played any more.
If you don't see how the case against MSFT has gotten a lot tougher for MSFT compared to last year, I don't even know where to begin. Do some basic DD - or talk to any lawyer with even half a clue.
So a lot HAS changed for MSFT compared to last year. Earnings can keep accelerating, but because of the new p/e environment, it will not be rewarded as in the past.
As for how much what retreated last year...
In 98, MSFT was never negative in share appreciation for 98 (past the first 10 trading days of January 98). Thus far, this year MSFT is still in the plus. The greatest percentage of decline in MSFT in 98, was 23% (from a high of 117 to a low of 91). At this point in time MSFT is 18% off it's top, so if it goes lower than 73, we will have exceeded that decline. Let us hope not, as there is support at 74. But please note, that at 73, it's only 3 points from 70 - the level at the beginning of the year... anything below that is a negative fo the year - that is 27% from the top (we are already down 18%) - and this is May. Not great to be only some 12% up for the year at this point (last year, at this point, we were up by 34%).
My point is that it's unrealistic to expect doubling every year. We'll be lucky to break 95 this year, and it's entirely possible that we may appreciate by "only" 20% this year. |
