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Author: ramurthur Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 156989  
Subject: Is it Right time to Buy MSFT Date: 10/7/1998 11:02 AM
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Greetings !!

I am just wondering whether this is the right time , to accumulate MSFT stock @ 97 . Thank you for any suggestions..

-Ram
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Author: oilbroker Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4217 of 156989
Subject: Re: Is it Right time to Buy MSFT Date: 10/7/1998 1:54 PM
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I own the stock and I am also looking to add to my position, but with this market being so irrational, I wouldn't be surprised if MSFT didn't go down to the mid to upper 80's. That's when I will probably pick up some more, unless some fundamentals change in the company which I think are highly unlikely. That's my two cents worth.

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Author: LynchFan Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4218 of 156989
Subject: Re: Is it Right time to Buy MSFT Date: 10/7/1998 2:39 PM
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Author: ramurthur     Date: 10/7/98 11:02 AM    Number: 4216 Greetings
!!
<<I am just wondering whether this is the right time , to accumulate MSFT stock @ 97 . Thank you for any suggestions.>>

Well it all depends on you view of where the market is heading. Anybody remember the last time the NASDAQ closed UP on the day??????????

IMHO, the market has over the past few weeks been discounting the market risk out of some of the high fliers like MSFT, DELL, CSCO. Notice I said "MARKET" and not company risk.

MSFT is still trading at a PEG of 2.0+, (or twice its projected growth rate), still sugesting to me that there is still SUBSTANTIAL market risk in this company and POTENTIALLY business risk.

CSCO, on the other hand, is currently trading at a PEG of 1.25, down from around 2.5, so a lot (but not all) of the market risk has been discounted out here. Even DELL, which has traded up as high as a PEG of 2.5+, has come down to around 1.5. When MSFT hits around $57, mortgage the house and buy, its rare you can pick up a solid growth company like MSFT for its growth rate multiple.

One cautionary note, if MSFT drops to this PEG and the market is diverging (going up), watch out below! Up till recently, there was no market risk and no business risk discounted into MSFT shares. We are just now getting to discounting out market risk.





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Author: calvinfinch Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4229 of 156989
Subject: Re: Is it Right time to Buy MSFT Date: 10/8/1998 12:07 AM
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Buy, buy, buy! Microsoft has a whole lot of way to go. They have a profit margin of close to 30% if not better. At almost any price Microsoft is a good buy. If they hit 145.00 by early next year and split you'll be extremely happy. That's what I'm guessing will happen.

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Author: LynchFan Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4232 of 156989
Subject: Re: Is it Right time to Buy MSFT Date: 10/8/1998 11:45 AM
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CalviFinch wrote:

"Buy, buy, buy! Microsoft has a whole lot of way to go."

Calvin, did you read my post on 10/7. Obvioiusly not! So how much money did you say bye bye to over the past two days?


"At almost any price Microsoft is a good buy."

To me it is scarry that this type of psychology still exists in the market!



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Author: AngryCandy Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4233 of 156989
Subject: Re: Is it Right time to Buy MSFT Date: 10/8/1998 11:49 AM
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<<"At almost any price Microsoft is a good buy."

To me it is scarry that this type of psychology still exists in the market!>>


Yes, it is scary. I keep thinking bearish sentiment is as high as it can possibly get and then I hear people saying things like this and acting like this is just another little pullback.

We're already talking one of the worst bear markets ever - it just hasn't shown up in the Dow and S&P yet.

You can start averaging in to the beatup stocks now, IMHO, but you sure as heck don't want to be taking up any big positions.

-chris

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Author: foxwalker Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4234 of 156989
Subject: Re: Is it Right time to Buy MSFT Date: 10/8/1998 1:32 PM
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LynchFan wrote:
"MSFT is still trading at a PEG of 2.0+, (or twice its projected growth rate), still sugesting to me that there is still SUBSTANTIAL market risk in this company
and POTENTIALLY business risk."

My reading of the Gardners' books, as well as various boards here suggests PEG values are mainly used to value of small caps. Under what conditions (eg, no dividend) do folks use it for estimating fair prices for large caps?



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Author: DavidInnes Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4239 of 156989
Subject: Re: Is it Right time to Buy MSFT Date: 10/8/1998 7:00 PM
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foxwalker said:
My reading of the Gardners' books, as well as various boards here suggests PEG values are mainly used to value of small caps. Under what conditions (eg, no dividend) do folks use it for estimating fair prices for large caps?

I say:
Maybe by the time this bear run is over MSFT will be small cap again and PEG will be useful for valuation again. :*)

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Author: 0to60 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4289 of 156989
Subject: Re: Is it Right time to Buy MSFT Date: 10/15/1998 10:05 AM
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LynchFan wrote:
>One cautionary note, if MSFT drops to this PEG and >the market is diverging (going up), watch out below! >Up till recently, there was no market risk and no >business risk discounted into MSFT shares. We are >just now getting to discounting out market risk.

That doesn't really answer his question. Sure, if MSFT's PEG was 1.5 or less, it would look like a great buy. But it ain't. And it might not ever get that low (if it ever does, I would assume the company is in trouble). In the meantime, ramurthur doesn't own the stock and isn't making (or losing) any money.

Besides, PEG's aren't necessarily the way to evaluate companies like this. If you went by PEG, you would never have bought AOL or PFE, and thus missed out on a lot of profits. I think you have to compare MSFT to other companies in the same industry. Right now, MSFT trades at 60 times earnings, whereas the industry average is over 70. MSFT is a strong, solid growth company with nearly flawless fundamentals.

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