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

To: johnd who wrote (8547)	6/21/1998 4:49:00 PM
From: Ibexx	Respond to of 74651

johnd, I heard these arguments before. Re. ready to weather about 5- 10% correction Why subject yourself to such pain? I would sell the stock or write calls if I felt the way you do. When in doubt, don't own it. Regards, Ibexx

To: johnd who wrote (8547)	6/21/1998 11:54:00 PM
From: ed	Read Replies (1) \| Respond to of 74651

I do not know if NT5 and Office 2000 will be delayed, I have not heard such rumor , and where did you hear it ? As for the interest, I do not see the raise of rate in the near future, and in fact the rate may drop from here due to the Asian crisis, and the reduction of federal debt. As to the stock of MSFT, I have no idea if a 10 to 15% correction will start from here, but what I do know that millions of dollars is currently moving to the US market everyday from Hong Kong alone, and those money will definitely go to the stock market.The same for the rest of Asia, billions of dollars is now moving to the US market to protect the value of money. So, the US market is now flooded with money and no way the rate will be raised in the near future, and also think about the devaluation of the Yen, if US raises the rate at this point, it will definitely weather another round of currency devaluation in the Asian market, and this time US can not get away from it.

To: johnd who wrote (8547)	6/22/1998 12:08:00 AM
From: ed	Respond to of 74651

One thing I forgot to mention in my previous post is the Chinese is now going to the SouthEast Asia to buy local companies, and if the Japanese yen can be stabilized at this point, the Asial economy will be back to normal and growing path in one to one and half years. However, if not, then we all sink together,because the Chinese yen will start to devaluate, and that is a big market , not only in Asia but the worldwide. 1.4 billion population (non official) ,getting richer and richer. We already see BA got hit seriously .

To: johnd who wrote (8547)	6/22/1998 7:32:00 AM
From: Ed Schultz	Read Replies (3) \| Respond to of 74651

MSFT is incredibly cheap! >> (a) The deferred earnings argument: MSFT will continue to have a percentage of revenue and earnings deferred forever from now. That is part of the game in the enterprise licence business. The argument of E being higher would be true if MSFT, starting next quarter stopped defering. That is not the case. In fact, I expect larger and larger percentage of revenues will get defered with time. << Basically flawed argument. It is the rate at which both are growing that matters. For example, lets assume that a company makes $100M in one year. The next year they report earning $50M and defer $50M. According to all reports, they grew by 50%. In actuality they grew by 100%. Since you expect larger and larger percentage of revenues will get deffered with time, that implies that Microsoft is growing MUCH faster than the reported 25%. >> (b) This quarter MSFT is project to report 47c. Even if it is a penny or two higher, it is still less than 25% EPS growth on an expected 15 - 18% revenues growth. The picture is pretty much same for rest of the year. << And what products were announced this year? How about next? SQL Server 7. Visual Studio. Office 2000. NT5. Win98. >> (c) Look at those lawsuits. AT&T suit on NT SPA suit on Server business DOJ 20 state Attorneys Sun micro on Java ... << Every major analyst have stated that these are inconsequential. One went so far as to say this was a "sideshow" for Microsoft. >> (d) Interest rate environment could if gone unfavorably, first affects high PE stocks. << Simply not true. If interests rates go south there will be a flight to quality. And that implies people will flock to Microsoft. >> (e) NT5.0 is likely delayed and won't affect revenues at least for another 12 months, so is office2000. PC growth worldwide is slowing partly due to Asian crisis. << NT5 delay works in Microsoft's favor as they don't want to compete with Y2K dollars next year. Office 2000 is on schedule thank you. PC growth is booming in South America and Eastern Europe. It is also growing like gangbusters in China. There is plenty of room left for growth. Even if growth does slow a bit, with the sheer numbers that are being talked about, Microsoft should still manage very well. As I ahve mentioned, it all depends on how you look at it. Bottom line is that Microsoft is a money machine. They have excellent R&D with outstanding marketing. This is a great mix for any company. I'll go on record as stating that this company is dirt cheap even at these levels.