"The value of the stock is determined solely by how much investors expect Microsoft to pay them in the future in dividends."
So the investors looking for a 10% return (very low end) on their money are expecting MS to eventually pay out $50 Billion a year in dividends? Pretty darn unlikely!
Even the experts don't agree on a method to assign a "value" to a stock. And market value is tossed around by earnings estimates, growth rate, volatility, and even good old fashioned speculation.
You're assuming that the wealth creation driving new house buys is sustainable. Most of the new wealth in the last four years has been created by rising internet/tech share prices. If Yahoo and Ariba and the rest don't quickly (next two years?) bring their profits in line with their very ambitious valuations, Wall street will move on to the next big thing, and the resulting share price crash will take a lot of froth out of the housing market.
This nicely illustrates the core problem with Microsoft. Whereas IBM tries to beat Kasparov by investing millions in devloping a sophisticated piece of hardware and software, Microsoft invests millions in hyping a product that was invented elsewhere (the internet) and probably wont work all that well anyways.
Or, for the conspiracy theorists out there, Bill is just trying to shake general belief in democracy for the sake of eventually turning the U.S. into his own despotocracy;)
Slashdot Mirror
"The value of the stock is determined solely by how much investors expect Microsoft to pay them in the future in dividends."
So the investors looking for a 10% return (very low end) on their money are expecting MS to eventually pay out $50 Billion a year in dividends? Pretty darn unlikely!
Even the experts don't agree on a method to assign a "value" to a stock. And market value is tossed around by earnings estimates, growth rate, volatility, and even good old fashioned speculation.
You're assuming that the wealth creation driving new house buys is sustainable. Most of the new wealth in the last four years has been created by rising internet/tech share prices. If Yahoo and Ariba and the rest don't quickly (next two years?) bring their profits in line with their very ambitious valuations, Wall street will move on to the next big thing, and the resulting share price crash will take a lot of froth out of the housing market.
This nicely illustrates the core problem with Microsoft. Whereas IBM tries to beat Kasparov by investing millions in devloping a sophisticated piece of hardware and software, Microsoft invests millions in hyping a product that was invented elsewhere (the internet) and probably wont work all that well anyways.
;)
Or, for the conspiracy theorists out there, Bill is just trying to shake general belief in democracy for the sake of eventually turning the U.S. into his own despotocracy