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

To: DownSouth who wrote (15306)	2/1/1999 12:44:00 AM
From: Lee Martin	Read Replies (2) \| Respond to of 74651

Downsouth, you're not crazy! My estimation of the big picture that is driving the tech stocks and the rest of the market can be summed up in one sentence: The steady decline in PC prices is causing a steady increase in worldwide demand for PC's which are being used to access the internet. How do we take advantage of the first part of the trend, namely more and cheaper PC's? The price for every component in the PC is steadily dropping except one, the OS, which for 90% of the market is Win98. So when IBM,CPQ,DELL,HWP slash prices and everyone cries about declining ASP's, which they always do after DELL reports, MSFT owners can sit back and say "ka..ching $$". When MSFT comes out with an upgrade virtually the entire installed base of PC's gets upgraded, and that installed base grows larger with every new PC sold. So MSFT is my choice to play the "more and cheaper PC's trend". DELL being the lowest cost hardware provider is my second choice. The second part of the trend deals with the question of just what are all these PC's being used for? I think most of them are being used to access the internet. The safest and most direct way to play this part of the trend is through AOL. Now all of these new people accessing the net causes the demand for infrastructure hardware to store more data and move it around faster to increase at the same rate. The way to play the data storage trend is with EMC and the faster pipe trend is with LU or my second choice CSCO. So the way I see it we have one big trend and 6 bellwhether techs (MSFT,AOL,DELL,EMC,LU,CSCO) that IMHO stand to benefit the most from this trend. What I'm trying to figure out is how to allocate my $$ within this group to maximize my return and minimize risk. However I think everyone will agree that you could probably throw a dart or your $$ at this group and whatever stock you hit will significantly outperform the market. Regards,Lee