161–170 of 218 posts
If you take into account stock split and dividends for Microsoft, the total return from 2000 until today is about 13% which is not great but much different than the misrepresentation of a 60% loss. The returns would be much higher if you had not bought in 2000 before the crash which Ballmer could have had no control over. For example if you had bought shares at the end of 2002 than your total return over that time wo…
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64x being tame by dot com standards still doesn't make it cheap! As for the earnings argument, look at it this way - Apple and Microsoft both made about 18B after taxes in 2010. Difference is, Microsoft's been printing money for almost a decade. Google doesn't even come close. It's a fantastically profitable company. You can speculate about the future however you want, the fact remains that this company that until a…
It is a fantastically profitable company. A fantastically profitable company with the P/E ratio and historical growth rates of a public utility. Why invest in Microsoft when you could invest in Exxon Mobile, Johnson & Johnson, The Coca-Cola Company, Novartis - all companies with better long term growth rates and beefy dividends. Look, I am not trying to be discouraging, but I find it grating how little progress Micro…
The flaw with speculating about the future is that anything that's certain will be priced into the stock immediately. Any other "educated guesses" you make might as well go to a blackjack table.
A lot of people think they're being prudent just because they're investing with a "long-term perspective". That doesn't get you anything in and of itself - I can buy a car and hold onto it forever but it'll never appreciate (well, until it becomes an antique). It's true that you shouldn't daytrade, that you should be willing to stomach holding something even if it loses value. But that just makes it more important that you understand why you've chosen to hold onto this stock for so long. And I don't think speculation about the future is a good basis for that decision. If you can point to something in the present (e.g, 18B in net income) there's a lot more assurance that you're actually getting something for your money.
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You can make money by buying a stock, having the business get more valuable so the stock goes up, and selling the stock at a higher value. Or you can make money by buying a stock, having the business make money and pay it out to you in dividends. At the end of the day, what matters here is how much money you make and how long it took you to get it, which is a function of sell price - buy price + dividends received -…
Even a company that's growing ought to pay dividends in most cases. After all, if your shareholders have faith in continued good business they have the option of reinvesting their dividends. Companies that don't pay out are essentially telling you that your money's better off in the company, which strikes me as a rather arrogant way to treat your owners.
That's not true. Companies have opportunities to invest money into things that a normal investor cannot. If a company can invest the money at an above average rate it should.
For US investors, it's even more clear cut as dividends would be taxed if payed out. If the company instead retains and prudently invests that money, the company in essence is able to generate a return on money that would have been payed as taxes. Over the long haul, that "float" is extremely valuable.
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You mean instead of those out-of-the-box Windows users having to just go to www.skype.com? It's pretty easy to install.
There is a significant difference between bringing in a new product and having that product be a part of the standard install on every laptop/desktop from the perspective of Enterprise IT.
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Even a company that's growing ought to pay dividends in most cases. After all, if your shareholders have faith in continued good business they have the option of reinvesting their dividends. Companies that don't pay out are essentially telling you that your money's better off in the company, which strikes me as a rather arrogant way to treat your owners.
Dividends are basically saying "we're returning earnings because you can probably invest them better than we can". It's up to the investor balance their portfolio and decide how much money they have invested in the company, dividends are supposed to be that mechanism.
It's not that I think every company should always pay out a dividend. It doesn't make sense if you're growing fast, or losing money. Berkshire doesn't have to because we generally agree that Buffett's a better investor than the rest of us. For the vast majority of companies not in these categories though, it seems like the shareholders would be better off if they just got the cash.
>> In fact, the acquisition by most accounts sounded more like a move by Ballmer to buy something that others may have wanted to own — just for the sake of others not owning it. This struck me because I'm presently reading Stephen Levy's In the Plex , in which he reports at great lengths about why Google decided not to purchase Skype when eBay had it up for sale: mainly owing to Skype's peer-to-peer technology not be…
If you look at Microsoft's words and actions in regards to their competitors, they are clearly completely clueless. In fact, "Microsoft people" are often completely blind to everything not made by Microsoft. Reading HN you may never know, but if you've met actual .NET stack developers, or MSCE's or anyone else similar, and you'll find people who make websites and don't know what apache is. Or they'll dismiss open sou…
Yes, I know Haskell. Yes I know python. Yes, I've used django. Yes I've programmed in PROLOG and EIFFEL. Yes I can use a shell and succesfully configured a linux server countless of times. Fuck me, totally unrelated, but I even know MATLAB. Yes, I had my hands on SOLARIS servers. Yes, I programmed a SPH solver with CUDA. Yes I know javascript, not just jQuery. ETC.
So here I am, an actual ".NET stack developer". Ask me anything.
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There's a big difference between "driving the stock back up to unrealistic levels" and totally flatlining - which is what MS has actually done. Yes, the former is ridiculous. But so is the latter.
If you factor in dividends the return would be something around 20% over the past 7 years. Crappy, but definitely not "flatlining". Microsoft makes twice as much as Oracle, pays a dividend, and yet has half the P/E multiplier. It's just not a sexy stock right now, but you can't deny the underlying profitability. Personally I think it's just that they've made some really embarrassing mistakes (Bing?). None of the fail…
And you're right about spare cash and the bottom line. From what I understand, the twin cash cows provided by Windows and Office hide a LOT of sins. In that sense, Microsoft is like some hopelessly corrupt petrostate. Sure, the place is a shambles in every way imaginable, but as long as the oil keeps flowing, nothing matters enough to dislodge the ruling class.
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Chromebooks actually compete with Windows. Apple basically doesn't - it serves a small segment of premium users. Microsoft is still for the masses and will continue to be unless a competitor undercuts it. Which is precisely what Google is now doing.
Apple serves students very well. Take a look at current trends in laptop purchases by incoming students. http://itc.virginia.edu/students/inventory/compare/ If these numbers are indicative of the US as a whole, 45% of new laptop purchases are OSX. IPhone, IPod touch, and IPad are selling well outside of the premium market. From these data points I still feel Apple is the main competitor to MS.
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Microsoft has also repurchased a lot of stock over this period which should inflate the stock price. In any case, it doesn't matter that much especially given a relatively small number of years and a stagnant price per share. The general premise of Microsoft stagnating is true regardless of how you tweak the numbers.
Buying back stock increases earnings per share, not the stock price.