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   Microcap & Penny StocksMSFT - How low can it go


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To: sandeep who wrote (30)10/23/2000 6:42:35 PM
From: Andy Thomas
   of 39
 
--MSFT and INTC can return all the investors' money in less than 30 years with almost no growth. --

what is the price/book?

how does that money grow? is that more like,

'assuming the stock market bubble continues to grow, msft and intc can return all the investors' money in less than 30 years with almost no growth...'

andy

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To: sandeep who wrote (31)10/23/2000 6:43:09 PM
From: Andy Thomas
   of 39
 
no, you're wrong and i'm right about this...

andy

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To: Andy Thomas who wrote (32)10/24/2000 3:12:09 PM
From: sandeep
   of 39
 
MSFT earned ~$1.8/share this year. Assuming almost no growth, it should return it in 30 years or less along with $8/stock that they have today.

I am sure intc's numbers are similar.

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To: sandeep who wrote (30)10/24/2000 3:22:31 PM
From: Dave
   of 39
 
"MSFT... can return all the investors' money in less than 30 years with almost no growth"

They could. But they won't. Instead, they will squander it on "strategic investments" in innovative new technologies which they will then destroy to prevent them from threatening their entrenched Windows/Office monopoly. And they will waste it trying to forcibly push losers like WinCE, MSN, and Dot-Net in order to illegally leverage their Windows/Office monopoly.

In contrast, AAPL could return investor's money in a long weekend by liquidating their short-term investments and auctioning off their intellectual properties. But they won't. Like MSFT, they are on a Holy Mission, and they won't rest until they have conquered or been defeated.

"You may choose to not have an optimistic view of the world, I do."

Predicting MSFT's demise IS optimistic.

Dave

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To: Dave who wrote (35)10/24/2000 4:29:43 PM
From: sandeep
   of 39
 
Dave, we will see. I think I will live for another 30. How about you ? If so, let's put a friendly wager in. My claim is that if you add all the earnings from now for the next 30 years, it will be more than the current stock price for both msft and intc. Are you willing to take the other side ?

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To: sandeep who wrote (36)10/24/2000 5:52:23 PM
From: Dave
   of 39
 
"My claim is that if you add all the earnings from now for the next 30 years, it will be more than the current stock price for both msft and intc."

I don't dispute that their quarterly reports will claim that much in earnings. However, much of those earnings will continue to mysteriously disappear into black holes that don't show up on the quarterly report, like that billion dollars that they invisibly lost last quarter on those naked MSFT puts, and the billion or two that they lost on their AT&T "strategic investment." With the kind of accounting shenanigans that MSFT (and to be fair, everybody else) engages in, it is very difficult to determine how much they are really earning without going in with a team of auditors.

Last quarter, MSFT claimed an increase in profit by including certain investment gains (while artificially excluding other investment losses). That's great, until the market finally really goes south, and there are no investment gains. Then you will see either (1) declining MSFT profits or, more likely, (2) changes in MSFT's accounting methods.

And anyway, THIRTY YEARS? I'm not going to wait thirty years just to get my principal back. If I'm going to let money sit in a stock for thirty years, I expect some gains, at least equivalent to what I would get in treasury bonds. That means that, assuming treasury yields of, say, 7%, I expect to get back at least (1.07 ^ 30) times principal, or about 7.6x.

Dave

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To: Dave who wrote (35)10/25/2000 12:48:06 PM
From: Andy Thomas
   of 39
 
--Predicting MSFT's demise IS optimistic.--

amen

they're an out-of-control beast... i should know... i was there and helped build that monstrosity... only too late did i realize that it was 'business as usual' with these guys.

andy

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To: sandeep who started this subject12/1/2000 8:41:59 PM
From: Andy Thomas
   of 39
 
i've always been a value investor. price/book has always been a big deal to me. so when msft reaches book value or below, i would say accumulate.

they'll probably offer a dividend to attract investors back so it should be a great stock at that time.

is book value $5-$7?

one thing msft could do to really screw everyone would be to trash their own stock, and use their existing cash to go short on everyone else.

so even though their own stock would crater, they would make a fortune off of their puts on the rest of the market.

so the process is to:
1) buy as many 'stealth puts' as they can
2) trigger some problem in their own stock and watch it crater.... make a bad earnings announcement or something.

again even as their own stock situation cratered, they would make a fortune off of their puts on the rest of the market.

that's the only thing they can do to avert a continued deterioration in their overall asset situation.

as it is their stock price will deflate in a more 'natural' fashion, over time. their cash hoard will shrink and if their paper investments are long on this market... watch out.

if just one major corporation with a cash hoard would use that to short everyone else, then somehow trigger continued selling overall, that company would make a lot of money right now.

but those companies that are using their cash to go long on the current market... that strategy's about to explode like a bouncing bettie... ouch.

let's get back to making products instead of reporting earnings largely inflated by market 'investments'.... what are some people calling microsoft now, 'mutualsoft?'

to be fair, msft isn't the only company doing this (going long with existing cash and getting 'earnings' out of it). intc comes to mind as well. i'm sure their are others.

andy

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