Microsoft looks beyond AOL

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Basic economics

Oh please, buying stocks is basic economics. The whole idea is that you buy a stock at what you believe to be below "fair value". The expectation is that it will rise to or above "fair value" at which point you sell and make a profit. If you've never heard of it before, it's called "buying low, selling high". It's, of course, always a risk because what you consider fair value is different from others. But at the same time, you're not playing roulette.

If anyone buys a stock without knowing this basic principle, they might as well be throwing money out the Windows =P

Ownership without knowledge (and no, installing Windows or Java is not knowledge) is nothing to brag about, especially for someone begging for education

BTW, if you want to know why MSFT is so highly recommended, it's because projected growth is around 10%, profit margins are around 50%, and the stock pays a dividend so you are GUARANTEED a certain return. Not only that, the moving average has remained stable, no major fluctations and analysts believe MSFT has a strong future pipeline. The recent releases of VS2005 and SQL Server 2005 reinforces this belief as a number of major corporations have finally started to move more of their mission critical applications to Microsoft. Also, analysts are very upbeat about faster growing divisions such as MDS, MED, and MSN, all of which have posted high growths in revenue and profit. Oh, and the P/E is very low making it a bargain stock pick.

It is for these reasons (not out of interest of seeing if MSFT or GOOG will win) that analysts believe MSFT is headed higher than current valuation. If you really did buy MSFT below $25, looks like you lucked out

Posted by: java.user   Posted on: 12/22/05 You are currently: a Guest | Members login | Terms of Use

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