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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Mattyice who wrote (38749)	8/10/2010 10:41:47 AM
From: Jurgis Bekepuris	Respond to of 78476

You can post whereever you like. Just don't expect somebody to react to your short term plays. 5 months is not medium or long term. If you want a productive discussion, let's talk about 2 years to 10 years at least. You did not listen. MSFT IS IBM. Already. If you don't realize that, you have not looked at its business. There is no need of any acquisitions. I completely agree with what Spekulatius wrote to you. Also maybe you should look at this: Message 26743330 Of course, alternatively, you can listen to Apple and Google fanboys and buy all the puts you like. Your call. :)

To: Mattyice who wrote (38749)	8/10/2010 11:51:08 AM
From: E_K_S	2 Recommendations Read Replies (1) \| Respond to of 78476

Hi Matt - Re: Microsoft Corporation (MSFT) I started a position in MSFT in 9/2009 at $25.24/share. At that time and now I consider it a value play. This was the first time I have owned it with my previous "software" play in ORCL. One of the reasons I started a position was that MSFT has lots of cash and very little debt. In fact they are able to pay off their LT debt from net income in 4 months (or 120 days). My Buffet rule is LT debt should be paid off from net income in four years or less. MSFT can do it in 4 months! With the credit markets in free fall (back in 2009 and not too much better now), this was a metric I wanted to have for any new purchase I might make (if not I must make a good argument why not). Only until the credit market improve would I change my view for this metric. Cash is King. Second, their PE is below 10. I like to buy stocks when the PE (or forward PE) is at 10 or below. It's a simple rule but has worked over the 37 years I have been investing. The company has excellent free flow cash flow and they continue to deploy it to expand their revenue streams. They have not been too effective recently but do continue to invest in new products for the future while still booking qterly profits. Finnally, it is one of a few technology stocks that pay a dividend. Although small it is 6x the yield I am getting at my local credit union. My downside risk is small and since I look for a 10% return per year, I have a target of $30.00/share where I will begin to peel off shares to book my profit. I already sold 50% of my shares at $30.11/share on 12/09/2009 and continue to hold the rest as I believe the value I saw in 9/2009 is still there. My position is small (<.05% of the portfolio) but makes up one of several "value" technology stocks I own (INTC, GLW, VRGY, HON, DD - their solar cell division, MOT, NOK). As you can see, VRGY is the only company that does not pay a dividend. I received these shares from the Agilant spin off but continue to hold them for the exposure to the semiconductor sector (they build test equipment). I no longer hold Agilant (sold in 2009). MSFT is my most pure play in the software sector. I hold 87 positions in my taxable portfolio and my technology basket of stocks represent maybe 3% of the total portfolio value. I suspect other value investors see MSFT the same way I do. The downside risk is very small (I am a big buyer on any pull back below $20.00/share). The upside is small too perhaps 20% with a 2% dividend. I earn 2% while I wait for my $30.00/share target price. I also like the Call Write strategy if I can pick up cheap shares. EKS