Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Moominoid who wrote (5616)	3/28/1998 4:28:00 PM
From: Exacctnt	Read Replies (2) \| Respond to of 74651

David, I applaud anyone who makes money in the market using whatever strategies that are best for them. Your comments: <<Microsoft is undervalued only in the sense that people are prepared to buy shares in it because they know other people will take them off them when they want to sell at a higher price. I'd argue that that is unsustainable in the long-run like most other speculative bubbles.>> As far as Microsoft being over valued, fairly valued or under valued, it may not matter much in the immediate future. Currently, there is so much money coming into the market, primarily from baby boomers, that needs to be invested in stocks. People who never invested in the market are wanting a piece of the action. Personally, I'm being approached by relatives of mine who want to get into the market. They are asking if I would invest money for them. Their money has been parked in bank savings accounts, CD's, and/or some type of money funds. None of those types of savings pays more than six percent. They all are asking themselves. "Why am I keeping my money in accounts that pay so little interest"? In the past, the little guy wanting to get into the market was a sign of a market top. In today's environment, the little guy getting into the market may not automatically denote that the market has topped, at least not immediately. What if the following scenario is unfolding? What if the investing newcomer of today is looking at retirement and unlike past generations of people facing retirement, the newcomer is fearful of not having enough money for retirement? What if the newcomer faced with life expectancy getting higher, questionable pension and retirement benefits, and the availability of social security, is starting to recognize that if he wants to retire at the age of 60, 62, or even 65 and maintain his lifestyle, he better start increasing his personal net worth? What if he recognizes, correctly or not, that the stock market is the only method available to increase his wealth? What if this is an entirely new market that is going higher strictly because the un-invested or under-invested common man feels that he is "missing the boat"? How long would such an environment continue before the bubble is burst? What if this phenomenon lasts for years? How high will the market go if this is happening? Will we see a market similar to the Japanese markets of some years ago? I do not yet subscribe to the fact that this is a new market. These are just some of the questions that I'm asking myself. History shows that markets eventually arrive at proper valuation. However, if this is the beginning of a new era with money continuing to flow into the market, where will it be invested? Newcomers will most likely invest in big name proven performers. Microsoft will be high on the list. I am fearful of two events, being fully invested and a sustained bear market unfolds, and being under-invested in a new era market. I've taken a long route to say simply -- I will not RISK BEING OUT of Microsoft as long as the fundamental story is still intact. I hope that I didn't get too carried away. Regards, Bob