TECHNOLOGY WATCH
MICROSOFT - When you try to rule the world, you create many enemies as IBM did in the past and Microsoft does today. As industry observers, we are betting against WINTEL and for the "Alliance against Microsoft": IBM, NSCP, NOVL, ORCL and SUN. Microsoft stock is WAY overpriced but industry analysts don't seem to care. It has run out of positive momentum and plenty of anti trust activity is on the horizon. Beginning 1998 the N/C will begin to take away some of their multi-terminal licensing fees. As one sharp industry analyst told me: " Better not buy MSFT: I would add " Better still, sell it or short it!"
INTEL- We repeat our Intel Forecast written 8/27/97 for November Worth Magazine: "Sell over 80 and on rallies into the Spring, BEFORE April. Buy to accumulate next summer, and/or 55-65 next year. However do NOT expect it to reach 1997 highs in 1998. Intel this year was under Saturnine influences. They made a serious mistake in doling out technology (not delivering 300MH) this past spring and keeping prices too high. This allowed their competitors to gain a PERMANENT foothold among computer manufacturers. Because of this profit margins WILL CONTINUE to deteriorate into 1998 (although from high levels).
Starting next Summer, Intel is under Jupiter aspects and should offer new and better products, albeit with less generous profit margins. This should begin to reverse Intel’s price decline even as its deals with more earnings disappointments and less lofty P/Es."
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