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   Technology StocksMicrosoft: Windows 97


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To: Mark Finger who wrote (21)1/20/1997 9:38:00 PM
From: damniseedemons
   of 74
 
>In July, 1995, MS had several closes over 100, and was as high as 107 or 109 momentarily. 3-4 months later they closed below 80, and spent significant time in the low 80's. Further, they were in the low 80's as late as Jan, 1996. If you look back at my post, I am predicting a similar scenario now, with a drop to the low 60's by summer.>

Mark, things were so much different back then. For one, we saw a cyclical peak in technology stock in general--and a cyclical bear market in semiconductor stocks. Also, a major drag on MSFT were the fears that Microsoft had missed the paradigm shift to the internetworked computing world. Remember how even Goldman Sach's Rick Sherlund (Goldman is MSFT's investment bank, and Sherlund is a close friend of Bill Gates as well as MSFT's "guru" analyst) downgraded MSFT for that reason? Meanwhile, the internet stocks were running like mad! Windows 95 was over, and there was basically nothing to look forward too....

Anyway, this time, MSFT is unquestionably an internet force. Better still, they have many key products spread through the pipeline. For the next several years (at least) Windows NT will be a huge growth engine for MSFT. For now, it's NT4. In about 6-9 months, NT5. And in mid-late 1998, 64-bit NT (with Intel's Merced processor). Office 97 was just released. Windows 97 coming in mid-1997. BackOffice is showing tremendous growth....

And the above is only a small sampling of their pipeline. Lest we not forget their content initiatives, development tools, games, Windows CE, etc. In short, MSFT is more powerful than ever. For any long term investor, this stock should be a core holding....

Sal Habash

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To: damniseedemons who wrote (35)1/21/1997 8:39:00 PM
From: Kory B.
   of 74
 
Sal, I couldn't agree more. I own several computer companies and the web microsoft has woven is much more intricut then most people realize. It goes beyond just having the public (end-user) buy their software. The vendor support is unlike anything I have ever seen before, in any business, industry or product.. So much in fact it is a little scary - don't get me wrong I own tons of MSFT, and I am accumulating as many shares as I can. They are not the best but they are the only game in town.

L8r

-koryb

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To: Kory B. who wrote (36)1/22/1997 7:29:00 AM
From: Robert Scott
   of 74
 
Kory,

Don't you think MFST is a little ahead of itself?? At over 40X trailing earnings and with growth to slow down to low 20's it seems overvalued to me. It should carry a slight premium to its growth rate due to its position, but 2X - seems 2 much.

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To: Mike Magarahan who wrote (34)1/22/1997 7:35:00 AM
From: Robert Scott
   of 74
 
Mike,

My Thoughts - By year-end, Java will have enough standards and tools to begin to make a dent in MFST's onslaught. While Windows will maintain a strong dominent position for some time, MFST must embrace Java to maintain its growing position. They are trying to essentially take over Java by developing their own version or at least splinter it like Unix - it will be interesting to see if they can succeed - if they do, all but investors lose.

Most of the world would like to see their dominence disrupted and toppled - Standards based Java has the ability to do that.

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To: Robert Scott who wrote (37)1/22/1997 4:47:00 PM
From: Kory B.
   of 74
 
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!

-koryb

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To: Kory B. who wrote (39)1/22/1997 6:41:00 PM
From: damniseedemons
   of 74
 
Kory, Robert, and All,

I agree with Kory that MSFT is going to play a dominant role in our lives. I don't suppose anyone happened to see the Newsweek article from about 2 months ago? It spoke of the 21st Century as being "The Microsoft Cenutry." The author went on to talk about Microsoft being the most powerful force since the Roman Empire....

Anyway, with Java, ever hear of MSFT's public slogan, "embrace and extend." Behind the scenes, think of it more like, "embrace and demolish," "divide and conquer," etc.

Obviously Robert, you aren't versed on what MSFT is doing with Java. I don't feel like writing an essay, but in short, they are fragmenting it so that Java's "write once, run anywhere" slogan won't hold true (this is similar to what has happened to UNIX). What they are doing, is optimizing Java for Windows--making it BETTER for Windows, so that Windows extends its dominance.

And BTW, MSFT plans to be number one in Java development tools. In fact, they just announced their Java foundation class libraries (which are basically like Legos, that are put together to buils Java apps.). For more, go to news.com

Sal Habash

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To: damniseedemons who wrote (40)1/22/1997 9:42:00 PM
From: Kory B.
   of 74
 
Sal, thanks for the input - I am excited yet it is a little spooky... Oh well, on to another day.

-koryb

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To: Kory B. who wrote (41)1/23/1997 2:26:00 AM
From: Bruce R. Schlake
   of 74
 
Hi fellows, couldn't help but overhear your conversation so I thought I would share a very interesting statistic I heard today that may help put this in perspective. I had this on tape and had to listen to it twice to make sure I was quoting it accurately.

They said Microsoft's current market capitalization adjusted for inflation is what IBM's was in 1951. From that point, over the next 9 years IBM went up 16 times in value.

Seems today was another sign of the changing of the guard with msft continuing to rise and ibm down 10. History does repeat, go with the flow.

Good luck.

Bruce

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To: damniseedemons who wrote (40)1/23/1997 6:55:00 AM
From: Robert Scott
   of 74
 
Sal,

I am aware that MSFT is trying to splinter Java much in the same way that Unix is splintered today. Kory's post about how things are cheaper due to MSFT will certainly not be true if they are successful in splintering Java.

Let's also not forget that MSFT is a 6B company who has warned about slowing revenues & earnings & increased investment. There is no question in my mind that they are making good, sound investments - I just feel the investor enthusiasim is at a peak and there are some challanges given the stock price, the warnings from the company and Java.

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To: Bruce R. Schlake who wrote (42)1/23/1997 6:57:00 AM
From: Robert Scott
   of 74
 
Very interesting Bruce - thanks for the post.

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