Are you still holding to your prior views?
Yes, and no. When I started posting that Microsoft investors would witness a declining stock price last December ($115), I was concerned that the stock, and the market as a whole, was unsustainably too high. My opinion, as posted around Christmas, was that those who purchased Microsoft around $90 would be well rewarded by the time we were out mowing our lawns. The court case influence was always unpredictable because confidential negotiations are difficult to analyze; hence, I recommended reducing margin and curtailing exposure to highly leveraged option positions -- it's one thing to walk a tight-rope, but quite another to do it without a net.
Today, things look a little worse to me than before. We may be blessed with substantially lower prices before Microsoft, and the other tech stocks, finish haemorrhaging. I don't see the usual signs that we've reached a bottom. When I see something encouraging, I'll let people know. As usual, unpredictable events surrounding the current DOJ mess can alter investor perceptions instantly. In a news vacuum, I expect that we'll eventually see this stock priced for the worst case before a 'normal' assent begins.
I still think the courageous will pick the pockets of the timid. We may have put the lawnmowers away and begun raking leaves first. Anyway, don't lose heart, Microsoft isn't about to disappear. Sure we've suffered an early defeat in court, but remain focused on what's left instead of what's lost.
Cheers, PW.
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