May 31, 2006

Microsoft - STAY AWAY!


I have been hearing so much about Microsoft being cheap. Every time I post about Apple (new store, new partner, new computer), I get 50 emails from readers saying - "Microsoft is so much cheaper, pays a dividend, yada, yada..."

Good news Microsoft fans, Microsoft is now offering their employees, free towels in the corporate showers and better food !

I think it is time I update the title of this blog:

Trends - Find them, ride them, get off, AND STAY OFF!

Microsoft's price trend ended in 2000. There has been no one entry point (based on price - or even product by that matter) to get back on.

Today, they are further away from that point - THAN EVER!

In the beginning, it made sense for Microsoft to react. They had a monopoly so why innovate. They have 30 cents of every dollar falling to the bottom line. Competitor's panicked, whined, sued and folded. Peck, peck, peck, peck.

Along comes Yahoo, Google, Apple - round 2 and those "clever" Chinese pirates.

For Microsoft, there has never been a worse time to be reactive, yet they have never had a more reactive leader than Ballmer.

In investing terms they call it a Value Trap.

I say there has never been a better reason than today to STAY OFF!


PS - I can change my mind - trends do reassert themselves. I just don't need to be the first brave soul to find it! I guarantee you that you WON'T be the first to find it either.

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