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Strategies & Market Trends : Value Investing
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To: E_K_S who wrote (32162)9/25/2008 11:11:28 PM
From: Jurgis Bekepuris  Read Replies (1) of 78710
 
I disagree on the banks - I think survivors will do really well in 5-10 year timeframes. Competition will be decimated, they will merge a lot of branches and get a lot of benefits of size, while starting a new bank will be tough and even the conventional banking will bring a lot of profits. So I will stay in BAC, WFC and perhaps reenter USB + maybe GS and JPM.

But MSFT and ORCL are probably good bets too. Both of them may somewhat benefit by credit crunch hitting the intermediate size tech companies that need money to grow and can't get VC funding or IPO. In fact, BDCs already are in a crunch and they do fund some tech companies (although perhaps inferior ones).

I would like to see MSFT to become more like IBM though, since I think they will have difficulty in maintaining Windows/Office market share although both of these will be significant cash cows for foreseeable future. Somehow MSFT needs to get more of a culture where even smaller parts have to be profitable and on top of their game. Right now, although I understand the importance of fight of MSFT in web and music player spaces, I am not very happy about the resources poured there with little return. There are some parts of MSFT that have that culture though.

In short, I hold MSFT. I never bought ORCL, but I think Paul was right to buy it. In fact, I probably would prefer both ORCL or MSFT to his UTX purchace (to answer his question about what high margin mega caps I would prefer ;)). I still like GRMN in tech area and CSCO is also not that expensive. GLW is perhaps more crapshoot although cheap.
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