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what to do with microsoft?

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May 3, 2009
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what to do with microsoft?

The whole Windows 8 ecosystem launch is nigh, how would you trade the stock? Bought it on April after earning release and haven't recovered in value since then...was expecting to rally due to imminent huge product launch, but seems like the hype just isn't there and the expectation is low?
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Sep 2, 2007
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i lost a bunch of money in the market so i have no cred but my revised strategy would just set a stop loss and follow technicals. if it didn't go where you wanted it to go take an early loss and get out early. general rule

only way to make money in this choppy market is to trade the swings and i would load up on bear etfs while they are low or other ways to short the market. no way this economy looking forward deserves to be at 13500. october's historically a month for drops and post election drops too.
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noplan wrote: i lost a bunch of money in the market so i have no cred but my revised strategy would just set a stop loss and follow technicals. if it didn't go where you wanted it to go take an early loss and get out early. general rule

only way to make money in this choppy market is to trade the swings and i would load up on bear etfs while they are low or other ways to short the market. no way this economy looking forward deserves to be at 13500. october's historically a month for drops and post election drops too.
Is it better to watch in the sideways for october then? I do like the november to january rallies...
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Dec 11, 2005
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I strongly suspect Windows 8 will be a failure. No corperate customers are going to pay for that upgrade, everyone will stay with Windows 7.

But will it impact Microsoft's bottom line? Not really... the simple truth is Microsoft collects revenue from OS sales from every PC sold, and they all *will* be switching to Windows 8. The real question is if Windows 8 RT will have any impact on the Tablet space... too early to tell.
To be nobody but yourself - in a world which is doing its best, night and day, to make you everybody else - means to fight the hardest battle which any human being can fight; and never stop fighting. -- E. E. Cummings
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Mar 13, 2012
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brunes wrote: I strongly suspect Windows 8 will be a failure. No corperate customers are going to pay for that upgrade, everyone will stay with Windows 7.
Very large multinational companies have no choice but to pay for upgrades in their contracts. This also includes negotiated Office upgrades in the vast majority of cases.

Whether they choose to upgrade their corporate image is their choice and yes they may stay with Windows 7 since mainstream support is available till 2015. Generally the large customers on 3 year HW lease contracts update to version N-1 so that makes it Windows 7 a default for sometime to come. Versions "N" like Windows 8 are generally pushed quickly through the consumer channel. I see little value add to the enterprise with Windows 8 frankly.

As for dumping MS$ shares? I wouldn't as they pay a healthy divident and are a long term hold in my opinion. I would actually consider buying more on low.
If at first you don't succeed, destroy all evidence that you even tried.
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Jul 1, 2007
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Trade MSFT? I've simply owned it for many years and collect the phat dividend.

There's some hope for Windows 8. For one there are many large companies still using Windows XP company-wide (my own employer for one, though they just dropped OS/2 for XP around 6 years ago, so it could be a while longer, lol). If 8 is all they advertise it'll offer a more seamless cross-platform operating system between phone, tablet, PC. If it does, it can be huge for MSFT's phone/tablet OS business (even if it just means a doubling of their market share from around 5% to 10%).

Worst case scenario they'll still make lot's of money and pay me dividends. :)
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
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noplan wrote: i lost a bunch of money in the market so i have no cred but my revised strategy would just set a stop loss and follow technicals. if it didn't go where you wanted it to go take an early loss and get out early. general rule

only way to make money in this choppy market is to trade the swings and i would load up on bear etfs while they are low or other ways to short the market. no way this economy looking forward deserves to be at 13500. october's historically a month for drops and post election drops too.
Bravo. Cut losers fast and hold onto winners. If the trade didn't go in your favor right away, then you picked a wrong stock or wrong time to get in. Only TA can quantify (and provide values) for one to make this decision and limit how much you are willing to lose.

The swings in this market is exactly what traders love and that's how they earn money. Volatility. Learn how to do that and you'll also profit.
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OP: Sorry to hear it isn't working out. Its never a good feeling. What price was your entry? Here's my take on it:

- I can see price going down to 29.22, then it should reverse and come back up
- how far up? If it can go past 30.96 area, then it is looking good
- good news is, S&P, Nasdaq markets are still going higher these days/weeks, so this will definitely help Microsoft
- also watch AAPL, if that doesn't go up, then Nasdaq cannot go up much

- now if MSFT drops past 28.46 area, then that's really bad news, charts show it can drop to 26.14 area then

So up to you what you wanna do. Keep it hoping it will bounce from 29.22 area. If that doesn't happen, set a line in the sand for yourself and exit if it drops beyond 28.46 area. But seriously, it depends on how much money you've lost already.

Now if you chose to sell it, and then it turns around and goes back up, don't get upset at that and say "I should have kept it!!". Because that is not trading. That's guessing. What one should have done is get in at a GOOD price and time. The best thing to do is to learn from this. Even if you don't know how to read charts, you do know: Buy LOW, sell HIGH. Before you buy a stock, open up the chart and look, is it LOW???

Where you bought (yellow circle) below, was that a low? Not really. The blue rectangular box would be a low and a potential buy. Then determine a price below that you'd get out and admit the mistake if price broke it.

[IMG]http://imageshack.us/a/img411/4018/msft.jpg[/IMG]

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Thalo wrote: Trade MSFT? I've simply owned it for many years and collect the phat dividend.

There's some hope for Windows 8. For one there are many large companies still using Windows XP company-wide (my own employer for one, though they just dropped OS/2 for XP around 6 years ago, so it could be a while longer, lol). If 8 is all they advertise it'll offer a more seamless cross-platform operating system between phone, tablet, PC. If it does, it can be huge for MSFT's phone/tablet OS business (even if it just means a doubling of their market share from around 5% to 10%).

Worst case scenario they'll still make lot's of money and pay me dividends. :)
Exactly, you just proved the importance of market timing. Only if you bought Microsoft at below current price, then your phat dividends would make sense. If you bought it at the wrong time, say $52 bucks, now you are down 43%. No amount of dividend can make up for it.
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Thalo wrote: Trade MSFT? I've simply owned it for many years and collect the phat dividend.
PHAT dividend??? lol... it is barely 3% and that is because it is in the toilet... MS has never paid much of a dividend. If you are interested in dividends there are a lot better companies to buy than MSFT. And if you are interested in growth, there are also a lot better companies to buy than MSFT. Basically IMO MSFT is just a stable bluechip at this point, on the order of PG. Not very exciting at all and not worth talking about.
To be nobody but yourself - in a world which is doing its best, night and day, to make you everybody else - means to fight the hardest battle which any human being can fight; and never stop fighting. -- E. E. Cummings
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brunes wrote: PHAT dividend??? lol... it is barely 3% and that is because it is in the toilet... MS has never paid much of a dividend. If you are interested in dividends there are a lot better companies to buy than MSFT. And if you are interested in growth, there are also a lot better companies to buy than MSFT. Basically IMO MSFT is just a stable bluechip at this point, on the order of PG. Not very exciting at all and not worth talking about.
In today's low interest rate world 3% is HUGE!
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
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Thalo wrote: In today's low interest rate world 3% is HUGE!
Sure but there are a lot better dividends with better track record than Microsoft available.
To be nobody but yourself - in a world which is doing its best, night and day, to make you everybody else - means to fight the hardest battle which any human being can fight; and never stop fighting. -- E. E. Cummings
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Dec 11, 2007
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Markham
ideally you want to pick up MSFT in the mid 20s from a technically perspective, but it probably wont get there unless the whole market sells off from here.

MSFT has paid dividends since 2003 and has consecutively raised dividends each year since 2003.
over that period of time, their dividend has increased at a 12.5% compounded annual rate, going from 8 cents in 2003 to 23 cents in 2012. a 12.5% rate of increase translates to a doubling of the dividend every 6 years.

3%, low teens multiple, low teens dividend growth rate is very good relative value
you wont find many equities today with that kind of valuation that also have the fortress balance sheet and cash cow properties of MSFT.

i own the stock and would not sell here, but i am not buying either as 1. i have a full position already in microsoft 2. even as a long term investor, you have to respect the technicals.
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[IMG]http://imageshack.us/a/img411/3170/msft20121023.jpg[/IMG] ImageShack.us

Reviewing back on MSFT. From Post 8 (Oct 2, 2012) I said:

- I can see price going down to 29.22, then it should reverse and come back up <-- 100% happened, area 2 in the above chart

- how far up? If it can go past 30.96 area, then it is looking good <--- price did not make it up this high, so down she went

- now if MSFT drops past 28.46 area, then that's really bad news, charts show it can drop to 26.14 area then <---- price dropped past 28.46, so we'll see how far she goes down, maybe 26.14 area like I said

Actually, 26.13 to 25.18 is a pretty good area to buy in. I have this marked on my alerts. Again, don't just blindly follow me here. Your are responsible for your money.

Hopefully this shows everyone here that charts tell the picture. My reading on MSFT's chart worked out exactly, unfortunately for the OP because you are negative more now, I am sorry about that. Unless you got out as I suggested to cut your losers fast. I hope you did?

According to supply and demand, there is no real reason for MSFT to turn around until 26.14 area.
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So, would you advise selling now? I bought in at 29.25 a couple of months ago, and haven't seen a profit since. Was also hoping for a strong Fall quarter due to Windows 8/Surface etc.
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rfdrfd wrote: [IMG]http://imageshack.us/a/img411/3170/msft20121023.jpg[/IMG] ImageShack.us

Reviewing back on MSFT. From Post 8 (Oct 2, 2012) I said:

- I can see price going down to 29.22, then it should reverse and come back up <-- 100% happened, area 2 in the above chart

- how far up? If it can go past 30.96 area, then it is looking good <--- price did not make it up this high, so down she went

- now if MSFT drops past 28.46 area, then that's really bad news, charts show it can drop to 26.14 area then <---- price dropped past 28.46, so we'll see how far she goes down, maybe 26.14 area like I said

Actually, 26.13 to 25.18 is a pretty good area to buy in. I have this marked on my alerts. Again, don't just blindly follow me here. Your are responsible for your money.

Hopefully this shows everyone here that charts tell the picture. My reading on MSFT's chart worked out exactly, unfortunately for the OP because you are negative more now, I am sorry about that. Unless you got out as I suggested to cut your losers fast. I hope you did?

According to supply and demand, there is no real reason for MSFT to turn around until 26.14 area.
No i havent sold it yet. Bought at 32 i think, i know its high, but my intention was long term. But turns out its a dud so I dunno if i should just sell it and realize the loss or wait till q1 2013?
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TheRed wrote: No i havent sold it yet. Bought at 32 i think, i know its high, but my intention was long term. But turns out its a dud so I dunno if i should just sell it and realize the loss or wait till q1 2013?
You'll have to make that call yourself. Let this be a lesson to learn. BEFORE you make any trades, you must have a plan made:

1) Entry price
2) Exit for loss price <--- how much are you willing to lose, and set an automatic STOP MARKET sell order, this removes your emotions and guessing
3) Exit for profit price <--- you can have a few targets. If Target 1 hits, sell 50%, move your STOP MARKET price to break even, then let the rest run

Since you didn't have a plan, it is extremely hard to make your decision. Believe me, I've been in your shoes so many times. I now always do the above before I enter any trades. Along with position sizing to limit my max $ amount loss, but unlimited gains potential.

I hope everyone realizes this, saying LONG TERM investing does not mean you can keep a losing stock for years in hopes it will recover. This is not investing, hope is not a strategy. Esp. with a highly traded stock like Microsoft, it is not just traded by fundamentals all. Big $$ Institutions just trade it with High Frequency trading programs, all computerized on charts.

Holding a loser hoping for long term, that is emotions talking and zero risk management. Even if it recovers after 1, 2, 3 yrs back to breakeven, are you going to sell it then? Yes? then you made nothing on this trade for 1, 2, 3 yrs. Your annual return rate = nothing. Wouldn't a GIC have been better ? Why didn't we buy it at a lower price then? (How do we know low is low? Charts tell you)

Even worse is, if it gets back to breakeven, the you say "Oh, its going to go up, I'm going to hang on", if it does go up, okay you are happy. But what if it didn't and then came back down. You then smack your head and say "I SHOULD HAVE sold it". And then you'd be right back in the same situation as now. I did that with Nortel. Got greedy when it came back up to break even, but I had so many shares, I got greedy and held it. We all know what happened to NT. I finally admitted my mistake and sold it for a big loss, like 95% loss. At least it wasn't 100% I guess. But lesson learned.

Will it go back to $32 ? I don't know. Charts tell me its still heading down. If you pull up a weekly chart, you'll see MSFT at $32 area was a top. So that kinda goes against the principle of : Buy low sell high. So anyone even if you don't know how to read charts, just pull it up and look. Is it at a high or low? A kid can tell you high or low. Then at least you avoid buying at a high at a very basic level.

Main thing for one to learn is, have a plan before you trade. Take the guess work out of it.
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rfdrfd wrote: You'll have to make that call yourself. Let this be a lesson to learn. BEFORE you make any trades, you must have a plan made:

1) Entry price
2) Exit for loss price <--- how much are you willing to lose, and set an automatic STOP MARKET sell order, this removes your emotions and guessing
3) Exit for profit price <--- you can have a few targets. If Target 1 hits, sell 50%, move your STOP MARKET price to break even, then let the rest run

Since you didn't have a plan, it is extremely hard to make your decision. Believe me, I've been in your shoes so many times. I now always do the above before I enter any trades. Along with position sizing to limit my max $ amount loss, but unlimited gains potential.

I hope everyone realizes this, saying LONG TERM investing does not mean you can keep a losing stock for years in hopes it will recover. This is not investing, hope is not a strategy. Esp. with a highly traded stock like Microsoft, it is not just traded by fundamentals all. Big $$ Institutions just trade it with High Frequency trading programs, all computerized on charts.

Holding a loser hoping for long term, that is emotions talking and zero risk management. Even if it recovers after 1, 2, 3 yrs back to breakeven, are you going to sell it then? Yes? then you made nothing on this trade for 1, 2, 3 yrs. Your annual return rate = nothing. Wouldn't a GIC have been better ? Why didn't we buy it at a lower price then? (How do we know low is low? Charts tell you)

Even worse is, if it gets back to breakeven, the you say "Oh, its going to go up, I'm going to hang on", if it does go up, okay you are happy. But what if it didn't and then came back down. You then smack your head and say "I SHOULD HAVE sold it". And then you'd be right back in the same situation as now. I did that with Nortel. Got greedy when it came back up to break even, but I had so many shares, I got greedy and held it. We all know what happened to NT. I finally admitted my mistake and sold it for a big loss, like 95% loss. At least it wasn't 100% I guess. But lesson learned.

Will it go back to $32 ? I don't know. Charts tell me its still heading down. If you pull up a weekly chart, you'll see MSFT at $32 area was a top. So that kinda goes against the principle of : Buy low sell high. So anyone even if you don't know how to read charts, just pull it up and look. Is it at a high or low? A kid can tell you high or low. Then at least you avoid buying at a high at a very basic level.

Main thing for one to learn is, have a plan before you trade. Take the guess work out of it.
Can microsoft go back to 32? I am thinking of double downing when it hits 26 and by buying twice much, I could recover fully when it goes up halfway at 29. I think the probability of this strategy working is quite high?
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squadz wrote: So, would you advise selling now? I bought in at 29.25 a couple of months ago, and haven't seen a profit since. Was also hoping for a strong Fall quarter due to Windows 8/Surface etc.
Double buying just to cover up your losses is always risky.
Prefer to read about the amt of units that they sold in the first month or two..
but for now.. stop loss is your friend.

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