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Gates Says Microsoft Shares Are Too High
By Anatole Kaletsky  The Times of London
Bill Gates, chairman of Microsoft and the richest man in the world, added to growing concern about a financial "bubble" in U.S. technology stocks Sunday by saying that his own company's shares were "surprisingly high."

Photo
Michel Euler/AP
Gates spoke to the assembly of the World Forum in Switzerland

Microsoft, which has ridden the wave of enthusiasm to become the world's most valuable company, was probably less attractive as a long-term investment than a stable consumer company such as Coca-Cola, said its founder.

"Statistically our chances of still being one of the top 25 companies in America 25 years from now are not very high. I certainly hope we will still be there, but that will take at least three or four miracles."

Gates, speaking to a small group of journalists at the World Economic Forum in Davos, maintained that investors who were buying Microsoft shares at 60 to 70 times annual earnings, the sort of multiple the stock enjoys, were taking a long-shot gamble.

Microsoft, along with other technology companies, was inherently much riskier than an ordinary industrial company or consumer stock, he said, and should command a lower rating than the average company on Wall Street instead of trading at well over double the average stock market multiple.

Despite the high price of technology shares, Gates said that Microsoft would not be deterred from making small acquisitions, if these were needed to provide important synergies or fill gaps in its technological and market strategies.

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