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Microcap & Penny Stocks : MSFT - How low can it go -- Ignore unavailable to you. Want to Upgrade?

To: sandeep who wrote (36)10/24/2000 5:52:23 PM
From: Dave  Respond to 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.