PX,
Sorry, came home mean and ornery. Feeling much better now.
I am assuming you are speaking of a 100% short position in MSFT and not protecting LT gains. Also assuming you figure a downside potential of 30% or more.
You should realize that I believe the entire market is 30% overvalued but I wouldn't be caught dead shorting it.
Specific to MSFT
Windows CE--
The market potential extends far beyond palm applications- set top boxes, kiosks, heavy machinery, security systems, directories, smart terminals. Any "computer like" device.
Office 97 and upgrades--
Take a look at the help wanted ads. You want to work in an office? You need to know Office 97. The company that controls basic business software can pretty much count on growth. I understand the rate of small businesses opening up is at historical highs in the US. Europe, Asia, Africa --capitalism is spreading and Office 97 and future upgrades are going to be used by every new start up of any size.
NT 5 I don't know anything about the technical value, quality of programming, or ease of use of NT 5. All I know is every damn article I read mentions NT and waiting for NT 5. It had better be good and, if it is, it appears to have an eager market.
<<Are they going to:
(a) Grow at double digit rates forever?
(b) Grow at double digit rates for the foreseeable future?
(c) Maintain growth for the near term?
(d) Suffer a short term setback?
(e) Suffer a long term setback >>
Short term, they have all the weaknesses you originally pointed out. Long term gains should probably be protected by a hedging strategy.
Long term, Bill Gates could get hit by a bus. That is about the biggest risk I can think of because, (like Coke, GE, and Dell) Microsoft is American Capitalism. American capitalism is a long term growth story.
Like Larry (who underestimates himself), I am not the "wordsmith" many on the threads are. I hope you get my point.
Yogi
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