I did it right with MSFT. Bought at lower PEs and held, reinvesting dividends.
MSFT shares total price $/share
8-May-2006 500 $11,831.95 $23.66 basis
14-Sep-2006 1.726 $45.00 $26.07 div
14-Dec-2006 1.686 $50.17 $29.76 div
8-Mar-2007 1.813 $50.34 $27.77 div
14-Jun-2007 1.654 $50.52 $30.54 div
13-Sep-2007 1.746 $50.69 $29.03 div
13-Dec-2007 1.594 $55.95 $35.10 div
13-Mar-2008 1.959 $56.12 $28.65 div
12-Jun-2008 2.053 $56.34 $27.44 div
11-Sep-2008 2.112 $56.57 $26.78 div
11-Dec-2008 3.35 $67.12 $20.04 div
12-Mar-2009 4.062 $67.56 $16.63 div
18-Jun-2009 2.902 $68.09 $23.46 div
10-Sep-2009 2.752 $68.47 $24.88 div
10-Dec-2009 2.311 $68.82 $29.78 div
11-Mar-2010 2.383 $69.12 $29.01 div
10-Jun-2010 2.769 $69.43 $25.07 div
9-Sep-2010 2.895 $69.79 $24.11 div
9-Dec-2010 3.166 $86.36 $27.28 div
10-Mar-2011 3.397 $86.87 $25.57 div
9-Jun-2011 3.666 $87.41 $23.84 div
8-Sep-2011 3.34 $88.00 $26.35 div
8-Dec-2011 4.343 $110.67 $25.48 div
8-Mar-2012 3.475 $111.54 $32.10 div
14-Jun-2012 3.856 $112.23 $29.11 div
13-Sep-2012 3.701 $113.00 $30.53 div
13-Dec-2012 4.766 $130.80 $27.44 div
14-Mar-2013 4.71 $131.90 $28.00 div
13-Jun-2013 3.837 $132.98 $34.66 div
12-Sep-2013 4.087 $133.87 $32.76 div
12-Dec-2013 4.382 $164.11 $37.45 div
13-Mar-2014 4.316 $165.34 $38.31 div
12-Jun-2014 4.105 $166.55 $40.57 div
11-Sep-2014 3.606 $167.70 $46.50 div
11-Dec-2014 3.892 $186.78 $47.99 div
12-Mar-2015 4.411 $187.99 $42.62 div
11-Jun-2015 4.121 $189.36 $45.95 div
10-Sep-2015 4.48 $190.63 $42.55 div
10-Dec-2015 4.015 $222.99 $55.54 div
10-Mar-2016 4.39 $224.44 $51.12 div
9-Jun-2016 4.332 $226.02 $52.18 div
8-Sep-2016 3.939 $227.58 $57.78 div
8-Dec-2016 4.124 $248.08 $60.15 div
9-Mar-2017 3.882 $249.69 $64.33 div
8-Jun-2017 3.467 $251.20 $72.46 div
14-Sep-2017 3.384 $252.55 $74.62 div
14-Dec-2017 3.194 $273.40 $85.59 div
8-Mar-2018 2.934 $274.74 $93.63 div
14-Jun-2018 2.729 $275.98 $101.12 div
13-Sep-2018 2.505 $277.12 $110.64 div
13-Dec-2018 2.787 $304.67 $109.30 div
14-Mar-2019 2.695 $305.95 $113.52 div
13-Jun-2019 2.321 $307.19 $132.35 div
12-Sep-2019 2.277 $308.26 $135.36 div
12-Dec-2019 2.264 $342.92 $151.47 div
12-Mar-2020 2.206 $344.08 $155.95 div
10-Sep-2020 1.671 $345.20 $206.63 div
11-Dec-2020 1.797 $379.98 $211.42 div
12-Mar-2021 1.626 $380.99 $234.32 div
11-Jun-2021 1.479 $381.90 $258.20 div
10-Sep-2021 1.289 $382.73 $297.02 div
10-Dec-2021 1.244 $424.53 $341.36 div
10-Mar-2022 1.488 $425.30 $285.89 div
10-Jun-2022 1.671 $426.23 $255.03 div
9-Sep-2022 1.621 $427.26 $263.58 div
9-Dec-2022 1.912 $469.71 $245.66 div
10-Mar-2023 1.881 $471.01 $250.44 div
9-Jun-2023 1.439 $472.29 $328.27 div
15-Sep-2023 1.420 $473.27 $333.27 div
An $11,831.95 basis is currently worth $231,985.00. That's a 1860.67% total return on 18.59% CAGR. $14,141.45 in reinvested dividends are now worth $65,665.00.
The most important thing is I bought the basis at a PE of around 17. It's in my Seeking Alpha blog for precise details. Note most of the dividends were reinvested at low PEs, often between 9 - 13. The current PE of MSFT is around 34. But the historical 20, 15, 10, 5, and 3 year averages have been 20.29, 22.40, 28.51, 32.20, and 34.71.
MSFT is clearly overvalued according to the longer term PEs. I wouldn't buy right now. I will hold, as it's still a great company, growing revenue and profits.
A fair value for a blue chip when interest rates are normalized is between 18 - 22. In a low interest environment, which was the case for a long time, it's 20 - 24. We are back to normalized interest rates...and I expect this to last for decades. No more cheap money.
Stocks will be under pressure as the S&P500 reverts to a PE = 15. Hence, pick quality. Buy undervalued stocks...or dollar cost average in index funds. Nothing ever changes with this analysis. Here is the link to my Seeking Alpha blog again on MSFT:
https://seekingalpha.com/instablog/11370081-banmate6/5296757-reviewing-2006-msft-investment
BTW: I've done even better with my AAPL stock. A massive company has given me even bigger CAGR based on simple enough value analysis.