Microsoft Corp. - Moderated (MSFT) Message Board

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Technology Stocks : Microsoft Corp. - Moderated (MSFT)

MSFT 487.10

-0.1%

Dec 29 3:59 PM EST

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To: ProDeath who wrote (112)	8/14/2002 8:35:05 AM
From: John F. Dowd	Read Replies (2) of 19790

Hmmm. I just calls it the way I sees it. Whether you are aware of it or not MSFT is a great favorite of the shorts as it has great liquidity, high volatility, no dividend and is seen as a proxy for tech. This dip sh*t is for dips. With respect to the Fed they have screwed everything up to a fair thee well. In 1999 they flooded the market with cash because they thought Y2K would ruin the world ( I wonder if these guys use some druid incantations to decide their moves?) Then seeing that that the $ markets were somewhat overstimulated they decided to raise interest rates real hard because they were afraid that rising oil prices were going to cause inflation (Of course most people with any sense would have seen that the oil"tax" would act as a drag on the economy not a stimulant) so the market was given a double dose of the wrong medicine and we wound up with deflation. Recognizing this about 12 mos. too late the Fed started to ease but did so gradually and never caught up with the ever flattening yield curve which was telling the Fed "Hey we have NO INFLATION". It is hard to imagine that things could get more screwed up but they found a way to do it yesterday as they said "Hey we are probably going to need to reduce rates as the economy looks a little iffy but guess what we are not going to give you a rate cut". As Art Cashin commented this was about as messed up a verdict as could have been handed to the markets. The shorts took note of this most confusing signal from the Fed and the selling volume picked up with a vengeance and the DOW dropped nearly 170 points in an hour. Now there are more stocks than just MSFT in the DOW but there are none that the shorts love to play their games with as much as MSFT because of the reasons cited above. As for rates being at a 40 year low this is no big deal as inflation is at a 40 year low - maybe a 70 year low if deflation is what we are in. As for shoring up MSFT all the government has to do is get out of their way. As for their prospects they are huge as they move into the enterprise market (90 billion) with great strength and very economical products. .NET will bring them into the world of transactions, XBox like IE will continue to improve and gain market share and generate an entirely new source of revenues. As for IBM being their mentor you got it backwards (but is that a surprise?) as MSFT schooled them something fierce. IBM thought the $ was in hardware while Gates knew better. As for your trite comment about the Fed running out of ammo this is like the Forest Ranger telling his men to hold off on the water until the nearby towns are threatened with total immolation. But I can see a future for you in Central Banking. Send the Fed your thoughts they are right in line with their messed up thinking. JFD

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