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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: Prognosticator who wrote (5182)	10/28/1997 5:22:00 PM
From: uu	Read Replies (1) \| Respond to of 64865

Prognosticator: You state: > Are you really prepared to purchase Microsoft at a (trailing) P/E > ratio of 46. yes I did buy MSFT today at $125.5 despite their high P/E of 46-50. My main reasons for buying MSFT shares are simple based on my belief that Microsoft is too smart to blind itself from its arrogance and dillusions of trying to undermind Sun! I have come to believe that Microsoft will soon be back dancing around Sun's Java and bending over to Sun's wishes (after all these none-sense law suits are settled which should be fairly quick in contrast to what most people think that it will continue for months or years). I also believe they will realize that their idiotic DNA technology will simply be too isolative thus preventing them to make any real money from it. And lets not forget when it comes to make a buck Microsoft is very good at it (even if it has to sell its own mother)! So based on the work I am doing right now and my talk with MSFT development my gut feeling tells me strongly that MSFT already knows how idiotic their DNA technology is and how wrong it would be for them to compete rather than to cooporate with Sun on Java. So based on that I believe Microsoft will soon be back dancing to Sun's every wishes. When this happens and based on the following: 1. MSFT continues to have the best development environment tools in the market. By best I do not mean to imply that they are of the highest quality or usability for that matter, but from what is out there currently in the market MSFT's stuff is the best (at least as far as usability is concerned). SunSoft is basically going to leave that to Microsoft to spend the money and time to develop the Java development tools. They (that is SunSoft) will provide the raw technology for Microsoft (and others) to build development products from. 2. MSFT once starts dancing around Sun's every wish will continue to enjoy a healthy growth from its WebTV line of product. Sun's vision of computing will best work on mass consumer market and via products such as WebTV. 3. NT will continue to grow as a side effect of growth in the UNIX market (and not alone by itself)! Sun's thin client/server centric computing model calls for thin clients to be connected to one or more cluster of servers. In this architecture NT will be the perfect product to be used as the middle server talking to a cluster of UNIX servers. It should be noted that in this model, in my opinion of course, NT can grow if and only if UNIX continues to grow (which it will) and NT will need UNIX to have a meaningful growth. While UNIX does not need NT to continue its growth. (as UNIX can be deployed as the middle server also), however NT can not be used as the first tier due to its lack of scalability and extensibility. Thus making NT dependent on UNIX in a thin client architecture. 4. Microsoft is rapidly getting into media (e.g. Cable TVs), and telecommunication areas. There are what I call the highways on which Sun's thin client computing model will travel. Microsoft is positioning itself very well in charge of a portion of the toll fee that the carriers of thin computing model must pay for!! So you put all this together and you will find that Microsoft (after a couple of perhaps quarters of slow growth) will end up showing impressive growth rates again (thanks to Sun's new computing model). As for the P/E of 46-50, this is too high I admit. However because of market mentality to pay such a high premium and because I believe Microsoft will eventualy be able to deliver based on my assumptions above. Thus I believe it can maintain its high premium P/E. While I strongly continue to believe that the return (percentage wise) from an investment point of view on SUNW (and IBM) will be much much higher than MSFT shares (simply because of their leadership and extreme low valuations), nevertheless in order to be diversifed in the new computing model one can not ignore Microsoft. Despite their enormous size, they are quick to change 180 degree once they realize they need ot be flexible in order to make a buck! The best characteristic of Microsoft is their flexibility and willingness to cooporate when it comes down to making money! As always just my humble opinioon and not an investment advice (or advise for that matter)! Regards, Addi Jamshidi