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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Teflon who wrote (29452)	9/14/1999 8:39:00 PM
From: johnd	Read Replies (1) \| Respond to of 74651

Teflon, MSFT trades in a range of PE to trailing earnings. That range recently has been between 55 to 73 or so. The PE on any given day or week is function of several factors: Overall market, interest rate, msft outlook, software industry outlook etc.. From a buyer point, I look for the reasonable entry point. This is why trailing EPS by October is important. I think trailing EPS by Oct. will be 1.52 The low PE in Oct/Nov/Dec will be determined by overall market. I think overall market is ripe for correction, (for reasons I stated earlier: Too rich valuations, rising interest rate env). Also I expect mutual finds to go to cash position, as year ends. That is why 55 trailing PE on MSFT in Oct/Nov/Dec Q is a likely low. That is why 55 * 1.52 => 83 appears likely low point. On heavier corrections, we could get high 70s.