Microsoft's Lost Decade

[tulak]

Not gaming. MS is primarily an enterprise company. They’ve had significant growth in their cloud offerings.

 

[Totoro]

Cloud mostly indeed. Also, Apple is losing steam rapidly. Consumer luxury in high-tech is a tricky play to keep winning with. Remember Nokia, Ericsson, even Commodore with their 64 .. from rags to riches and back can go very fast.

 

[Ducati52]

SaaS (Software as a Service) was really the turning point for MS. Wall Street loves subscription services -- steady, reoccurring revenue.

 

[W2R]

And today Microsoft passes the 1 trillion mark in Market Cap and is today the #1 US company in the stock market

Yay!!!

I have at least as many complaints about Microsoft as anyone, but wow, that makes me feel good. Perhaps for sentimental reasons, in my heart I want to see them continue to succeed and rise to the top.

 

[NYEXPAT]

I call it a top here, next stop $88.00!

 

[Andre1969]

Wow, it really pays to pay attention to the dates on some of the earlier messages. When I first saw the title about "MicroSoft's Lost Decade", the first thing I did was look at their stock price history, and from 2009 to 2019, it looks pretty damn good!


I was going to comment on that...but then I saw it was an old post that just got revived. But yeah, it looks like they've had a pretty good turnaround. I had some MSFT awhile back. Probably should've kept it. Although, I'm sure a lot of other stocks did as well, if not better, in that same timeframe.

 

[kcowan]

DWs broker encouraged her to sell MS for profit-taking and I immediately bought it.

She soon let me handle her stocks.

 

[copyright1997reloaded]

While one of my dumber moves was not buying MSFT in the early 80's after it went public, I am glad I bought "Mr Softie" in 2010 (average cost $31.40) and have held it since. Another one of those 'dead' companies that wasn't.

 

[RobLJ]

I almost made the mistake as another poster; I was puzzled by the critiques of MSFT (and no mention of their cloud services Azure) until I noticed the dates.

Ironically, I bought Mr. Softy in July 2012 at $29.10 as an undervalued dividend play, a little after the early comments, although I liked what would be their cloud services. It's been my best performer during the period. Almost a 350% gain (I sold 1/3 after it went up 2.5 times). As I recall, it did basically nothing for a year, then started steadily moving up.

Note: I didn't do so well with SDRL.

 

[audreyh1]

And today Microsoft passes the 1 trillion mark in Market Cap and is today the #1 US company in the stock market

Well that didn’t last long - MSFT is close, but just under. Meanwhile today Apple is yet again above a $1 trillion market cap.

I never would have guessed that they could outrun Apple. Is it gaming that made the difference?

Well, didn’t take long to reverse, did it?

Cloud mostly indeed. Also, Apple is losing steam rapidly. Consumer luxury in high-tech is a tricky play to keep winning with. Remember Nokia, Ericsson, even Commodore with their 64 .. from rags to riches and back can go very fast.

Hmmm, then again, maybe not loosing steam so rapidly. Actually I think it was Apple who very much helped put those other companies out of business.....

If Microsoft can stick around so long as a still profitable company, I don’t see why Apple can’t do the same. Their P/E is far lower, yet they consistently rank as one of the most profitable companies in the US.

 

[Chuckanut]

I never would have guessed that they could outrun Apple. Is it gaming that made the difference?

IMHO, Apple had dropped the ball several times in the last five years and that is costing them business and dollars. A few examples:

1. The Apple ecosystem (one of the main reasons to pay the Apple Tax) has been allowed to deteriorate. The recent abandoning of the Apple Airport router is a good example. And through good software/app choices one can duplicate many of the advantages of owning all Apple equipment.

2. Apple is behind in 'home' devices such as Alexa. Alexa is not the brightest bulb on the Christmas tree, but Siri is worse, IMHO. Not sure about Cortana since I have never used it. Apple TV is OK, but not worth the premium over Roku, IMHO

3. The Mac (that's the one that brought them to the dance) has been allowed to languish. Mac Pro users are looking at over 5 years since the last meaningful upgrade. iMacs get refreshed, but no serious redesign in years. The lower-cost MacBook Air models are going away. Mac is being treated like the unwanted step-child.

4. Price. $1000+ for a phone/pocket-computer?!?!?!? Sorry, but there are some great Android phones on the market for less than 1/2 the price. I understand that Apple does not want to compete on the ultra cheap phone market, but at these prices, there are to many downsides to owning a phone that expensive.

5. iPad replacing real computers. iPads are not there yet, but Apple likes to pretend they are. Sorry but real computers are still the tool of choice for many jobs. (See #3 above).

Apple's main selling point is better security. How long that will last is anybody's guess.

My apologies for hi-jacking a thread on MS with my complaints about Apple.

 

[audreyh1]

Kind of ironic that it occurs on the day that Apple recaptures the lead with a return to >$1T market cap.

 

[kgtest]

I think its totally relevant to bring AAPL into it. These are competitors after all, competing for us as investors. So what MSFT and AAPL are doing is much different but also similar.

With MS rolling out the Azure cloud, and then pushing the Surface hardware...they basically have the game on lock for 2019. If you look at like MGK or VUG or QQQ or SCHG you will notice that most are now heaviest weighted with MSFT. A year ago it was AAPL. so all the fund managers also know what we know...MSFT has more sail.

 

[audreyh1]

Since those like QQQ are market cap weighted, aren’t they going to reverse today? Otherwise we’re talking .1% difference.

Active fund managers tend to follow the price action.

 

[kgtest]

Since those like QQQ are market cap weighted, aren’t they going to reverse today? Otherwise we’re talking .1% difference.

Active fund managers tend to follow the price action.

Indeed. With the switch the past day or two, you are correct.

 

[NYEXPAT]

That was likely the top for AAPL as well!

 

[audreyh1]

That was likely the top for AAPL as well!

Well, so far they topped last year after they were the first company to break the $1T market cap.

But they have been rebounding nicely this year, so who knows.

 

[kcowan]

It was Bezos who said that most competitors caught up to them in 2.5 years or less but with AWS, it has taken 7 years. So is it OneDrive, DropBox, iCloud or AWS?

 

[NYEXPAT]

That was likely the top for AAPL as well!

OK, next stop $130!

 

[Running_Man]

 

[John0019]

MSFT chart definition of parabolic, hockey stick, etc...pushing toward $200 now. Not sure how much further stock price will go without some pull back but their earnings and revenue $ still has a lot of runway.

Having just left the Megacorp (IT) world you can feel how much companies along with all their hooks (vendors, partners, clients, etc) are trying to evolve into the cloudlike environment and many have a long long way to go. MSFT (along with Amazon and Google) stand to benefit tremendously as this evolution continues.

 

[kgtest]

MSFT chart definition of parabolic, hockey stick, etc...pushing toward $200 now. Not sure how much further stock price will go without some pull back but their earnings and revenue $ still has a lot of runway.

Having just left the Megacorp (IT) world you can feel how much companies along with all their hooks (vendors, partners, clients, etc) are trying to evolve into the cloudlike environment and many have a long long way to go. MSFT (along with Amazon and Google) stand to benefit tremendously as this evolution continues.

Indeed. I just became AWS Cloud Practitioner certified. Nifty.

 

[RobLJ]

I bought in July 2012 at $29, as a value dividend play (although I was interested in their cloud initiative). It's been my best stock.

 

[BeachOrCity]

My observations about MS:

Their upgrades of Office are counter-productive. I know of no features not already in the product and every time they change it skilled current users go nuts. Stop! (They stole Word from Word Perfect, a perfectly adequate word processing program.)

The old adage that a programmer who knows where his bugs are nesting has a secure job is true (or at least was true) at MS. Testers can't find them all. The HR tool of rack & rank is foolish.

It has been probably 15 years since I retired from corporate life. At that time here is what I observed:

I don't think you can compare MS to IBM except for some enterprise software. MS has never been in the enterprise hardware business, nor have they done consulting. They both have database products but IBM (at least in theory) delivers a product ready to implement while MS provides a platform for the customer to finish developing.

I was glad to see this thread resurrected and went to look for the last post from 2012.

What’s ironic about the post above is back in 2012 people thought msft was dead money and IBM had a bright future.

Turned out msft executed a brilliant cloud centric strategy and ibm did not (but ibm talked about it a lot)

Too bad I gave up on msft during the lost decade.

All of this comes from someone who worked for ibm for 30 years yet owned msft stock for a number of years.

The moral of the story? Buy the index, even people in the industry who know the companies can’t predict how they will ultimately do.

 

[Sunset]

I bought in July 2012 at $29, as a value dividend play (although I was interested in their cloud initiative). It's been my best stock.

Same idea, I bought 300-400 shares many years ago as it seemed like a safe dividend payer... working out really nicely