MSFT will be the stock to own but short term, we could have problems.
I agree. I sold a bunch of MSFT the other day at 93 1/4 (after trying valiantly to get that elusive 95), but am very comfortable keeping the rest (which is still the vast majority of my portfolio) for the long term. But I don't envy you or anyone trying to figure out what will happen to this stock in the next six months. What will happen in the next week after Apple announces tonight what they're already telegraphing as a very good quarterly report? Are we going to see "sky is falling" stories about consumer Windows because the iMac is selling so well? Maybe.
Long term, though, sentiment will swing greatly toward Microsoft. As the Fortune article points out, Microsoft now has a business that is diversified enough to let it ride out and even flourish in a much different market than the PC-dominated 90s. Its web properties are finally gaining strength. Windows CE seems to be finding its way into enough devices that it will be a significant player in the device market even if it never becomes the dominant platform. And -- something not mentioned in Fortune -- Microsoft has made significant investments (Comcast, RoadRunner, Qwest, Rhythms NetConnections, and Microsoft's own WebTV) in the broadband area to give itself a prominent role as the internet moves to its next dimension.
But now that I've said some nice things, I'll add my wildly unpopular take on the trial. If Microsoft loses or settles and accepts some significant change in the consumer Windows business, then the potential value in these future technologies will become more quickly apparent. I'm confident that the company would shift focus quickly and successfully. If, on the other hand, they win or drag it out for years with appeals, the necessary shifts will come more slowly and more painfully for everyone involved -- including the shareholders.
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