It's been a busy trading day. Two more "Distressed" losers are gone - Electronic Arts (EA) and Jones Soda (JSDA); some more shares of Wells Fargo (WFC) were added to match the new addition American Express (AXP); but what I really want to write about is Microsoft (MSFT).
I'm not sure if the purchase of MSFT is a sign of investing maturation or a lack of imagination, but it is definitely one stock I never thought I'd want to own. I use the company's products almost every day - they leave me at something less than awestruck. The stock's "story has been told" - once upon a time, they achieved global dominance/monopolization and was briefly the largest company in the world by market capitalization. Then the genius-geek founder left, and the last decade has been dead money, settling in as a $260 billion has-been. Heck, in 2007 I even publicly lamented Microsoft's irrelevancy and lack of innovation.
So why MSFT, and why now? I guess I feel that a rising-from-the-ashes is due, similar to IBM circa 1993. Someday, somebody's going to replace current CEO Steve Ballmer, give the company some much-needed energy and focus, consolidate strengths and discard weaknesses, and use $62 billion in cash to fund its transformation. I don't know what exactly the new Microsoft and its killer product is going to look like, but something good must be out there beyond the desktop - IBM found life post-PC, after all.
Microsoft (MSFT)
Positives:
Massively cash-flow positive...plus $49B (cash minus debt).
3% dividend yield.
Negatives:
Steve Ballmer.
Needs to reinvent itself.
American Express (AXP)
Positives:
Historically-safe dividend (1.4%).
Warren Buffett likes it.
Negatives:
Flat revenue (3.3%) and profit (0.6%) growth.
Being a bank, owns a lot of debt ($59B).
Here's my current portfolio. As always, I believe in all of these stocks - until I sell them.
Apple (AAPL) 19.05%
Google (GOOG) 8.07%
Baidu (BIDU) 7.04%
Southern Copper (SCCO) 6.48%
Intuitive Surgical (ISRG) 5.03%
American Capital Agency (AGNC) 4.73%
Annaly Capital Management (NLY) 4.16%
Ace Limited (ACE) 4.04%
Amazon (AMZN) 3.23%
American Software (AMSWA) 2.87%
Tesla Motors (TSLA) 2.53%
Kinder Morgan Energy Partners (KMP) 2.44%
Apache (APA) 2.42%
Prospect Capital (PSEC) 2.32%
McDonald's (MCD) 2.18%
Blackstone (BX) 2.14%
Vodafone (VOD) 2.07%
Intel (INTC) 2.06%
Under Armour (UA) 2.01%
DuPont (DD) 1.97%
BreitBurn Energy Partners (BBEP) 1.64%
F5 Networks (FFIV) 1.64%
Computer Programs and Systems (CPSI) 1.49%
China Mobile (CHL) 1.42%
ConocoPhillips (COP) 1.41%
American Express (AXP) 1.30%
Microsoft (MSFT) 1.26%
Wells Fargo (WFC) 1.26%
The Distressed (BEBE, GSOL, LZB, MSI, PCS, RBCN, RVR) 1.17%
