The sleeping Giant.
Microsoft just announced that they signed a deal to sell $1.2 BILLION dollars worth of Windows to one of the world's largest PC makers over only 2 years. Article.
Yet, their stock price doesnt move.
Google just announced that they made that same amount last Quarter, and I cant wait to see how much the market loves them today.
MSFT's stock has hardly moved in the last several years. I think of it like a lemonade stand. If you have a lemonade stand with $1 in cash, and can generate $1 a day than you are worth a couple dollars. Let's say a few years later you have $100 in cash, and are not generate $100 a day. Are you still worth only a few dollars? The market thinks so.
Be smarter than the market (and thus the masses).
posted by Greg at 8:10 AM
2 Comments:
Much to your chargin the people who happen to own google THAT DAY will most likely make a pretty penny while microsoft will hover around the same price it seems for eternity. If 1.2 Billion dollar announcement doesn't bring Microsoft's stock up ask yourself what will? How is investing in Microsoft being smarter than the market today? Being smarter than the market by my definition is making money off of it and is not simply that you own good companies that the street seems to ignore. The stock market is a speculative little creature not a factual one doesn't it seem? Yes Microsoft has the better financials time ten. Does Wall Street care as of today? No. But at some point they will have to. Being smart in this context is really figuring out the market psychology not just owning good and steady companies. Being smart ---> whoever rode the google wave and cashed out, people who bought microsoft for the long haul, fill you own homerun here.....
Here is my philosophy is this:
Your day traders will go with the google's and your everyday long term investment individuals will go with the microsoft's. Get in where you fit in.
-Joe
its short term vs. long term. 80% of day traders lose money.
80% of day traders lose money. Figure that another 10-15% break even, 3 or 4% make 5-10% profit, and you quickly see that very few day traders make money. Sure they say they do, but they don't. Its like a gambler telling you about their winnings and not their losings.
Microsoft is very strong. The market will catch up...it always does. Market short term (less than 5 years) is driven off of psychology...market long term reflects fundamentals. I am preaching and prophesizing that MSFT, PETM, and CD will eventually be to the point to where they can no longer be ignored my media hype other glamourous companies get.
GOOG is sexy....but not strong. Enron was sexy. You could rewrite what you wrote and replace Google with Enron and get the same thing. (Dont like Enron analogy, use Overstock.com, or even more relevant Alta Vista!!!).
I dont gamble. I buy what others are missing, and wait for them to catch up with me.
Its worked well so far, and my only risk is following the crowds. I only deal with no brainers, that are so simple the market misses them.
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