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

To: Exacctnt who wrote (5622)	3/31/1998 2:52:00 AM
From: Moominoid	Respond to of 74651

As far as Microsoft being over valued, fairly valued or under valued, it may not matter much in the immediate future. They all are asking themselves. "Why am I keeping my money in accounts that pay so little interest"? One way the market could be fairly valued is if the equity-risk-premium has declined from its historic values. This is equivalent to saying that people are not so fearful of putting their money into shares as before. If this is the case then we might as well put our money into bonds as in the long-run the stock-market will no longer give returns that exceed those on bonds by much. As I see it if the market rises much more either we're heading into the Japan style speculative bubble or an ensuing period of long-run stagnation in stock prices. 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 don't want to be caught in overvalued (on traditional grounds) high beta stocks like MSFT if and when a surprise market correction occurs. In any case I predict that MSFT will go sideways for the next few months. We just ran up as much as at the beginning of last year after which there was a prolonged plateau. David