MSFT as an investment, as a company

[DanS]

Stashing stocks in my cave.

Corporate America is very healthy nowadays. Not at all like '87, f.e. Companies like MSFT are making good money and are expected to continue to make good money. On the other hand, as far as the markets are concerned, the situation can only get worse. Not much upside.

Regarding the real estate bubble, I think it is well on its way to at least a modest downturn. There is a 2-bedroom condo in my building that has been on the market for months. The area market (DC) was H O T only a year ago.

[Provost Harrison]

Originally posted by Dauphin
Debt is good.

Mars has no debt either, shame on them. Then again, Mars is not a quoted company.

Mars is a planet, silly

[Kidlicious]

Originally posted by DanS
One of the problems that Microsoft has is that it can't find businesses in which to invest its capital that return 32% net after-tax profit on sales (a curse that all businesses except Google and a handful of others would love to have). Currently, only their monopoly product lines do that and those are already fully invested.

I think we could evaluate whether the other two product lines (XBox, MSN) have the potential to be that lucrative.

They need to just increase their dividends. They can't use all that cash. Gates want's to keep Micorsoft in a growth stage, but it's not going to happen. Companies can't grow forever. When they change their strategy I think their stock will do better.

[Dauphin]

Originally posted by Provost Harrison


Mars is a planet, silly

No, he's the God of War damnit.

[Provost Harrison]

Or a chocolate bar. Mars has many forms

[One_more_turn]

Originally posted by DanS
One of its revenue generators is XBox 360? If so, how can you describe it as faring very poorly? Or are you talking about the company laying eggs on its way to the release of Vista?

I don't mean the XBox, that division is actually doing ok. However, MSN and small business segments are doing terrible since 2005.

Vista delay isn't helping stock price either. Many investors will decide to dump MSFT now, take the loss for tax purpose, put their capitals into more attractive opportunities, and come back when Vista doesn't seem so far out.

[One_more_turn]

Short homebuilder stocks can help you hedge against real estate collapse. Even if home prices do not fall, home construction and sale activities will certainly slow down, and that's enough to kill the homebuilders.

I already made some good money by shorting KB Homes. I'm currently looking for a good selling price in Toll Brothers.

Also, if you compare the stock chart of KB Homes from Oct 2004 until present versus the Cisco's chart from Oct 1999 to Apr 2001, the similarities are striking!

[SpencerH]

I like MSFT as an investment and as a trade. It's gonna crank out cash 'forever' and there is lots of stuff in the pipeline (new innovations vs more euro lawsuits) that'll make the price fluctuate. Hopefully, we're computer savy enough to ride the waves.