Well, people are just too short sighted and did not see the big picture. Microsoft start to be a company since 1975 and went public since 1987, in the past 10 years it is the PC which drive the progress of technology, and today this industry is continue growing , and it is far from being saturated. It is since 1992 , the internet technology came to the market and became commercial, and not till today most people can afford the internet service, and it is not till year 2005 , the application of internet technology will explode, so we still have a long long way to go. The world is in a turning point as far as technology is concerned (IT), and we are so lucky to be in the market at this point to enjoy the fruit brought by the revolution of technology. The opportunity is just there , whether you want to get on the bus is your choice , but
it will pass by within a blink of eyes.
Talking about judging the market, the PE really did not mean anything, but it is still
worth as a reference, but not a major one. The reason we invest in a company is because it has a potential of the future, but not the past, PE only tell you the past , but things can change pretty dramatically. Due to the invention of the WWW, company
can reach customers around the world , and the market expand dramatically, today , AMZN can set up a www on the net and people from all over the world can order books or CDs on internet, and this never happen before, as a result, AMZN's revenues increased dramatically, but the profit margin drop, because the profit margin of the books and CDs are so small, it can not offset the cost of delivery these products to the customers. Anyhow, the WWW really open up the world market for many companies who used to concentrate on the domestic market due to short of resources to open up the oversea market. That is why , those www.com stocks appreciate in the early stage of the internet areana. However, as more and more companies set up their www, the competition will get fierce, and then it is the time for these www stocks to settle down. However, which companies will benefit the most in this internet era ? The companies who provide the equiments to build those www, i.e
CSCO, Lucent Technology.Microsoft is in forfront of the technology revolution, and it is the driving force of the recent and future IT advancement, and in the years to come , it will prosper together with the technology revolution. 15 years ago I am too
young to catch the PC revolution, but today , I am old enough to understand what the invention of the internet means to the world , to everyone's daily life, to how we
handle the business, and to the commercial market, so this time , I won't miss the train. The diamonds on the crow are MSFT, CSCO, LU.
As to PE, well , company A can have a very low PE due to small outstanding shares,
but the money it made can be lousy, the productivity can be lousy too. For company B, the PE can be high , but the company can be very productive, and the money it made can be huge quarter after quarter, and potential of the market for the company can be enormous, however, due to the huge outstanding shares outstanding, which can make the PE of the company large, then , so what ? the PE is just a ratio of the
price of stock per share to the earning per share, mathematically, the large outstanding shares can make the PE look bad, then , again so what ? The PE is not
what we are investing at !!!!!!!!!!!!!!!!!!!!!!!!!! |
