Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Richie who wrote (21166)	4/21/1999 1:41:00 PM
From: Sir Francis Drake	Read Replies (2) \| Respond to of 74651

C'mon Richie - it is one thing to be a MSFT bull - quite another to refuse to face reality. I am a strong MSFT bull. I think that over at least the next 2-3 years, as MSFT comes out with new products, MSFT has a good chance of appreciating. I have owned MSFT as one of my core holdings for many years now. And I am not selling. However, I also trade a separate batch of MSFT - and that means looking at the very short term as well. In the short term, there is no question in my mind that MSFT is technically very weak. Look at the sheer amount of selling that institutions did in MSFT for almost 2 weeks now. Go look at On Balance Money Flow, check institutional activity in the stock. Staggering amounts of money left MSFT recently. This is hardly surprising. Again I stress - there is absolutely no "story" in MSFT right now - no reason to buy MSFT over the short term, as all you have to look forward IN THE SHORT TERM is the trial - which is not good. Today's market operates on momentum. There is none in MSFT (momentum in MSFT has been on an accelerated decline for some time now). Momentum money is going into select net stocks (online brokerage stocks). Very select tech issues (QCOM) etc. Face the facts - given MSFT's size, the sheer speed of growth can be found in smaller companies, or companies that are on a rocket launch, taking off on massive growth spurt (QCOM is a good example). Earnings don't matter (ask yourself why QCOM has a loss and rockets up, but MSFT has profits but climbs down) - what matters is the potential for explosive growth (200-300% or more annually). MSFT, is a behemoth that simply cannot grow by such percentage rates. It is a very profitable, still growing company - but it is a mature company. This is not a rocket that's going to quintuple in a year. At this point, MSFT is a conservative, good growth stock, but don't look for 100% yearly gains from now on. As I said before - it wouldn't shock me, if we have already seen most of MSFT's appreciation. We'll probably break 95 this year, but I'm not looking for much more. In the short term, I see MSFT trending down. There is very solid support at 74, and it really should not fall below 67 1/2. I don't think it'll stay down for very long, but it will be awhile before it heads into the 90s again. I see it as range-bound. As to Andy - why attack someone for having different views? Address his arguments, not his motives. And he does have a point - MSFT's earnings this quarter were not the kind that would support a share price growth over the short term. They were impressive given the environment, but that's not enough. From the point of view of those who look for rocketing growth, this was very disappointing - any revenue from stock sales should not substitute for growth from the core business (otherwise, please compare it to the performance of an investment fund). The 15% growth is impressive for MSFT in this environment, but woefully inadequate for a "rocket" stock. Therefore it will not have a "rocketing" p/e. I expect the p/e to slowly drift down. Look at history. That's what happens when you mature into a giant. Lets keep this thread focused on discussing the stock, rather than discussing personalites. Good luck! Morgan