Well, Scott to answer your question in one word it would be yes. But because I don't think the answer is that easy, I'll give you my basic shot at why I think MSFT will be the stock to own going forward (mortgage the house and retire).|
They dominate. Everywhere you look, TV (msnbc), Computers, Internet, Banking (online). I believe that Microsoft will play a major role in the way our lives funtion in the future. MSFT has agreements in place to cover virtually every major technology sector that is important now and will be in the future. Not to mention the fact that in most cases they have no competition - Let me repeat myself - THEY HAVE NO COMPETITION! They have huge margins - i.e how much does a diskette cost? Cheap! Cheap! Cheap!
As for 40x trailing earnings - so what! Look at cybercash, no earnings and at one time the stock was $50. Look at netscape, little or no earnings and whats the PE? So to base any trade today on old fundamentals, however sound those may be, is a little crazy in itself. To use that philosophy traders should be buying AT&T or any number of "dogs" out there that will give you a dividend and maby 5-10% gain per year - Screw that I am in to win! Go with the flow, don't buck wind.
By the way if MSFT wasn't around we would all be paying a lot more for browsers and internet software as a whole.
Have Fun - L8r
PS. MSFT Jan 98 120's (before split) now worth $41 i.e. $62,000 gain!
Rock and Roll Baby!