$Microsoft(MSFT.US)How much can Microsoft grow this year? Assuming the earnings guidance remains unchanged: the current static P/E ratio is 40, corresponding to a 39% ROE with 50% debt, which is very reasonable and not overvalued; the forward P/E ratio for this year's expected earnings is 33, corresponding to around 39% ROE, leaving approximately 18% upside potential. In other words, if Microsoft's stock price breaks above $470 this year, we need to consider whether earnings will improve or if it's slightly overvalued; if earnings don't improve but the price stays above $470, it might indicate a bubble is forming. Actually, many simple calculations can give you a rough idea of whether the price is expensive or cheap. If interested, I can share a basic method to calculate this together for fun.