Looking for the next Microsoft?
Google has gotten very popular with investors lately. Investors are continually trying to find the next Microsoft. Well I'm here to help you, my readers, find the next Microsoft.
It's Microsoft.
Microsoft's only real competition is the Government and themselves.
But what about Linux? Red Hat and their stock seem to be mentioned every few years as a threat to Microsoft. But it shouldn't be. Red Hat makes Microsoft more valuable, not less. Linux helps Microsoft. Think I'm wrong? Remember that Microsoft's only real competition is the Government and themselves. If monopoly laws did not exist, than Microsoft would simply use some of their $50 Billion in cash equivalents to buy Red Hat, who has a market cap of only $4.5B, and assets of $1.1 Billion. Microsoft's operations brought in $16 Billion in cash last year. They bring in more cash in a qaurter than their "Operating System Competition" is worth!
But what about Apple? Apple has a market cap of $60 Billion, and assets of $11B. Microsoft could buy them too with money in the bank! Why do investor's not understand this? Apple gives microsoft minimal competition, thus keeping governments off Microsoft's back.
But what about Google? Microsoft had $16 Billion in CASH from operations. That compares with Google only having $4 Billion in sales. MSFT made 4x as much cash as Google had total sales!!!!! Yahoo only had $3.5 in sales. SALES not Cash!!!
Microsoft has cash Cash is King.
Hell, MSFT just last year gave $30 Billion in cash to their shareholders in the form of a special dividend. They have more cash than they know what to do with. Do you think Google, apple, Red Hat, etc. have this cash problem? Don't you always think "man if I only had some more cash, I could do this or that"...well Microsoft does have the cash that the other companies wish they had.
But keep buying Google stock, keep thinking Linux competes, or that apple competes. I'm buying the best of breed, while you keep hunting for the lottery.
All the while, Microsoft will keep being the next Microsoft....while you keep searching for the next Microsoft.
Cash is King. Microsoft has cash. Microsoft is King.
posted by Greg at 8:14 PM
2 Comments:
Some people are into short term goals and don’t really care much about the company’s attributes, they just know that at this point in time a certain stock is doing well and is likely to go up, and they just ride the wave before it crashes (i.e. some daily wallstreet traders). On the other hand you have some like yourself who are into long term investment goals and base their investments on company culture, products, and financial statements which on the cover and more times than not is less riskier than the other. However, short term investing is just a different style. There is plenty of money in the “Googles” this day and age and the short term investments in general. Sure Microsoft is as safe and steady as ever but Google is this exciting company that is currently the darling of WallStreet. If you had the money why wouldn't you invest in Google and then cash out after you’ve made some money, seems like an easy win to me? You know they are only going to keep going up until they receive some bad publicity or are presented with significant legal issues. I'm not an expert but I don't see either happening in the foreseeable future. I wouldn't call buying Google or any of the other tech stock other than Microsoft playing the lottery but just a different style of investing. I am sure the smarter daily traders are doing a lot of trend analysis to score big on these stocks that surge instantaneously and then cash out. After all, investing money in the stock market is all about making money not what stocks you own. Last I checked we’re still spending that dirty ninj Benjammin Franklin and not Microsoft, Cendant, or Google shares. That being said I don’t have the time, knowledge, or resources to be a stock broker so I’ll just play it safe with the mutual funds and go the old reliable long term way. I’m just presenting a point that there are other styles of investing that are just as safe and more profitable as going the easy reliable Microsoft way.
Not that anyone asked but my opinion of Google and Microsoft but here you go… Google is way overpriced for what they are. They don’t have what I would consider a tangible product. They make the vast majority of their money off of internet ads. They have a lot of free services, information, and more information. So ya, as a Google user I think they are a cool cutting edge IT company but as a person with business insight don’t think they are the next coming of Microsoft. In fact I think they will need to justify their stock price sometime. We all know Google will need to grow up because it can’t sell internet ads the rest of its life. Microsoft offers a tangible product that brings in big time cash. Microsoft runs the corporate world. The majority of IT shops use Microsoft for the majority of their processes. Microsoft is highly available, already has their clamps on corporate America, too many people are use to Microsoft and are not likely to switch, they provide support and is held accountable (in the corporate world at least), and are surprisingly reliable this day and age. They are the hammer and we are the nails. But where are the stocks? One’s stock is a rock star and one is an old grandpa driving on the highway. One is making money for people in the stock market currently and one is not. So I don’t think it’s crazy for anyone to jump on the Google bandwagon, no. Google is skrillin like Nelly is grillin.
-Dickens
"If you had the money why wouldn't you invest in Google and then cash out after you’ve made some money, seems like an easy win to me? You know they are only going to keep going up until they receive some bad publicity or are presented with significant legal issues."
Greggie says: I have the money, and I won't invest in Google, because they are not the best. I passed on buying them at 85, and I'll pass at buying them at 800. I try to buy the best, the monopolies and oligoplies. Google will continue to make money off of ads (note I didn't say internet ads!). Google will be on your cell phone, on your fridge, in your grocery store, in your library, everywhere. I envision them being the first stage in a matrix type world. They are the very first signs of successful artificial intelligence made mainstream. Their system works because it learns.
But the fact of the matter is, what if the bad news comes tomorrow, then the bubble bursts and then you're poor
Google's stock is being bought because its a media darling, not because of the finanicals of the company....its late 90s tech bubble all over again. Microsoft could buy them if they wanted. They have ridiculous amounts of cash. (Bill's charity alone has more cash than GOOGLE, and probably more cash flows) Microsoft is King here. Microsoft will earn its investors more money over the long haul, even though google has returned more the last year.
Its a game of percentanges. Which is going to happen first: Google going to 900, or Microsoft going to 50. Both scenarios would be doubling their respective stocks.
Here's a hint: MSFT has a new OS rolling out next year (their money maker!!!!), their copycat version of google will roll out (and take market share from google), XBOX 360 will be pushed, Halo 2 rolled out (which MSFT owns), a newer version of Office, an iTunes copycat, two differenet LIVE suites to further dent Google's market share (live.com is one of them), MSFT is working with telephone companies on VOIP. MSFT is going to have a HUGE push in 2006 and 2007...probably their biggest pish to date....I don't feel that's reflected in their stock price because 1) people are afraid to invest, 2) people are overestimating GOOG, 3) people are underestimating King Softie.
I think MSFT is a bigger homerun than GOOG, with much less risk....and my money is where my mouth is. I own MSFT.
This is good discussion, and you wrote a bit, I'll probably move this to the front page later (which would be an unprecendanted Greggie Greg move!)
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