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

To: t2 who wrote (13101)	12/9/1998 7:09:00 PM
From: Uncle Frank	Read Replies (2) \| Respond to of 74651

tech2000, I hold both issues as well, but I believe Microsoft will outperform Intel. The semiconductor segment has proven itself to be cyclical in nature, so while they may run with abandon at times like this, they pay back big chunks their returns during the down cycles. As well, the s/c game is very capital intensive, with new fabs in the 1B range. Microsoft sells ideas on a inexpensive CDs for a very good price, and will (does) generate higher margins with less capital requirements than any semiconductor maker could hope for. While past performance is no guarantee, it is a damn good indicator. Run comparison graphs for msft and intc for 20, 30, 40, 50, 60, 70, 80, 90, or 100 months and you'll find out that msft has yielded the superior return in each case. I don't plan of selling either msft or intc the near future, unless government interference screws up the parade. Frank

To: t2 who wrote (13101)	12/9/1998 7:11:00 PM
From: Cory Gault	Read Replies (1) \| Respond to of 74651

Tech: Sorry can't give you an opinion there. I also hold significant long positions in both...have for a long time. Both of these are wealthbuilders deluxe in my mind (certainly have been up to this point). If I had a gun to my head I would say MSFT wins over next 2 years, Intel over a 5 year period..... CG

To: t2 who wrote (13101)	12/9/1998 7:13:00 PM
From: Cory Gault	Respond to of 74651

Tech: Actually I think you should sell your INTC and MSFT and go long on Canadian penny stocks........LOL CG

To: t2 who wrote (13101)	12/9/1998 7:52:00 PM
From: jim shiau	Read Replies (1) \| Respond to of 74651

Tech, I will say MSFT (I own both) , and the reason are: (1) INTC has serious competition on the low end market which will affect its high end market very soon. MSFT has no competition except from DOJ which to me is a joke. (2) The sub-1000 pc will be the trend of the future. Since MSFT dominate the low end software market (price from $20-$300), when the sub-1000 pc sell well, MSFT will do much better than INTC.

To: t2 who wrote (13101)	12/9/1998 10:36:00 PM
From: t2	Respond to of 74651

I believe MSFT will outperform with less downside risk. Reasons: 1. MSFT products INTERFACE WITH THE USERS while Intel's chips do not. If a INTC competitor comes along with a similiar chip, the computer users will not require any training to be able use it. Fact:All corporations have limited IT training budgets. However, if a MSFT competitor comes along with a new o/s, spreadsheet, wordprocessor, the market entry is much more difficult. No company out there wants to spend so much of its training budget on courses for such products. They do not have to spend as much for Office97, Windows etc. New employees probably would already have this training on these products that are standards in the industry. The training on upgrades is minimal. This is why corporations moved to MS OFFICE so rapidly in the last couple of years. IT managers wanted to adopt the standard in the industry.--bye bye Wordperfect and Lotus. 2. If you know one MSFT software package, it is easy to learn another on your own. Corporations would love this -- ie less training time required. 3. I believe competition in the chip business will remain strong but Intel is an exception. Why? "Intel Inside". Most consumers and corporations are willing to pay the premium for an intel chip, which represents the best in the industry. Pricing pressure on Intel is not as much as people think. 4. People don't want to be downloading patches from software developers to ensure the programs run well on AMD K6, although MSFT is working with AMD to ensure its software functions on AMD machines (I read this a while back somewhere). 5. MSFT has many NEW products in the pipeline and does not just rely on new computer demand alone. 6. MSFT competitors are very worried about Gates and co. This is a great sign how well MSFT has done and will be doing in the future. 7. Consumers would generally want to use the same programs at home that they use at work, which means, Office etc. Conclusion: I think both companies will be do well but Intel is no longer trading at a P/E of 25. I believe that with a P/E of about 37, there is significant seasonal downside risk. The case for MSFT is mostly reflected in Point 1 (above). The high PE is justified with points 5 and 6. Intel could move higher til early next year but MSFT should soar well into the year. Just my opinion