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

To: taxman who wrote (20790)	4/20/1999 2:45:00 PM
From: PMS Witch	Respond to of 74651

Thanks for the missing number. I think the trend is toward a higher PE over the years. MSFT PE is now quite a bit higher than it was a few years ago when the business was experiencing explosive growth. Ever wonder why? On the face of it, one would expect the PE to contract instead of expand. I don't really know why this PE expansion is taking place, but I believe it may have something to do with MSFT becoming a desirable portfolio tenant for reasons beyond immediate profit. In the past decade, MSFT has gained a very large exposure in the investment world, the computer world, and, thanks to the DOJ, the ordinary world too. Not only can you buy stock in an extraordinary company, you can buy stock in a company which everyone has heard of and respects. Microsoft doesn't pollute, exploit, poison, finance terrorism, destroy old growth forests, or beat every last nickle out of their customers. People can feel good about being a part of this company. I think these things, as well as stellar financial performance, has led to their current lofty PE. As others have posted, the future looks even brighter than the past. Happy investing, PW. P.S. About 20 years ago, I was looking at an AppleII computer. It was recommended I get a CP/M card for this machine. The CP/M card was made by a company called Microsoft and included their BASIC. I declined buying the card saying, "I'm not buying anything from some outfit nobody's ever heard of." Hard to believe, in a couple of decades, the largest market cap on earth. P.P.S. The falling interest rate and low inflation should cause the PE ratio of all stocks, MSFT included, to rise.