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

To: Dave who wrote (62447)	11/1/2001 1:15:30 PM
From: sandeep	Read Replies (1) \| Respond to of 74651

Historical P/E is not relevant. Just look at the P/E from the last 10 years. Sometimes, due to technological shifts, past becomes irrelevant till the new level stabilizes. Then, it becomes relevant...

To: Dave who wrote (62447)	11/1/2001 1:37:36 PM
From: David Howe	Respond to of 74651

<< The historical average P/E is closer to 15 than to 26. >> Fine, so MSFT is given a slightly higher than average PE due to the fact that they have a monopoly in one of the most profitable businesses in the world. In other words, their profits are VERY sustainable and VERY predictable. And, there IS, despite whay you may think, a LOT of growth potential out there for MSFT. That generates and deserves a higher PE. PE's are all higher now. You could argue that many are overvalued and I might not disagree. However, you can't look at ALL of history, you need to factor in things like low interest rates. There is higher demand for stocks (thus higher PE) when you can only get 2% in a money market. IMO, Dave