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

To: Gerald Walls who wrote (5580)	3/26/1998 7:33:00 PM
From: Tom Kearney	Respond to of 74651

Look at it this way, if you bought MSFT at $15 three years ago (split adjusted - but it seemed high then, too), you're essentially sitting on a PE of about 8 today. Adjust for inflation and time value of money you're still no worse than 10 or 11. That's not scary. This is why you focus on earnings, and companies that can consistently generate earnings. It's earnings that make the PE now look reasonable, not the market runup. With all the focus on the stock market, more people want in, whether through IRA, 401k, mutual funds, so supply and demand force up the cost of entry. Earnings is still the key. Regards, TK