____/ Mark Kent on Thursday 03 January 2008 18:41 : \____
> nessuno@xxxxxxxxxxxxxxxxxxx <nessuno@xxxxxxxxxxxxxxxxxxx> espoused:
>> On Jan 2, 4:56 pm, Roy Schestowitz <newsgro...@xxxxxxxxxxxxxxx> wrote:
>>> ____/ ness...@xxxxxxxxxxxxxxxxxxx on Wednesday 02 January 2008 23:22 :
>>> \____
>>>
>>> > Microsoft up 15%
>>> > Google up 50%
>>> > Apple up 133%
>>>
>>> > I think if you look over the last 5 years the comparison is even more
>>> > dramatic.
>>>
>>> It means very little. Microsoft is pumping cash into the stock. In general,
>>> stock price does not indicate much because it doesn't just gauge actual
>>> wealth. IBM and Dell, IIRC, are in heavy buyback mode as well. Novell will
>>> inevitably end up this way as well.
>>
>> Yes, I've read how many large corporations in the US are buying back
>> stock. But to the extent that is true of Microsoft, it means that
>> their 15% gain means less than it seems. I don't know if Apple has
>> been buying back stock, but surely their 133% gain is related to the
>> success of iPod, iPhone and OS/X.
>
> The actual share price is meaningless unless you multiply it by the
> number of shares in order to get the actual market cap.
>
> As Microsoft have been buying back shares, they have been reducing their
> market cap by the value of each of these shares which they bought back,
> although that is ameliorated by the rise in value which went on at the
> same time.
Google isn't far now from Microsoft's market cap. It recently surpassed IBM's,
IIRC, which isn't bad for a 9-year-old company, My worry is that Google
absorbs some ex-Softies, many of whom are vain, unethical, and inherently
anti-Google. They could poison Google from the inside and drop the "Do No
Evil" mantra in the sink. Watch Google closely and ensure it doesn't become a
bunch of geeks on a high throne. Apple is already suffering from that
syndrome, especially with recent growth.
> You then need to take into account the indices of the market for the
> same period, and as far as possible look at how the overall market
> moved. If they overall market moved up by, say, 10%, then Microsoft's
> 15% is really a 5% increase above the market, which might be almost
> entirely funded by share buy-back, thus reducing their market cap by the
> value of those shares.
>
> Of course, analysts look at this stuff all the time, but as many of them
> are non-technical, they often get things wrong, as they are as much
> driven by mathematical analysis of reported financial performance plus
> ongoing trading as they are by a deep understanding of the actual market
> in which the company operates.
--
~~ Best of wishes
Roy S. Schestowitz | Useless fact: ~70% of organisms are bacteria
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