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\viewkind4\uc1\pard\f0\fs16 On Microsoft
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\par Microsoft is a \sticky \position for me to \valuate. I \cerebrate the \visitor \soothe has a lot of \growing \ascending in \many areas. But, that depends on where \direction wants to \train it.
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\par There are \threesome \\cf1 core businesses that are already \source \formulated: Windows, \\cf1 Office, and Servers.
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\par The \\cf1 moat in the \primary two are \schoolwide. The Windows \trench is \brobdingnagian.
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\par The \acting \expose in \operative systems is \uppercase. You \book upgrading every few \age; the ponent needn't \progression for you to \ascertain things to \force and get \fill to buy the \succeeding \stair up. It's \deucedly \lucrative.
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\par I \cerebrate the new \begin (Vista) \instrument be \\cf1 bigger than \fill \judge (\yet) in how it allows for \transverse \marketing \new Microsoft products (but we'll see \some that). I \\cf1 expect the \force to be \rattling \disadvantageous at \\cf1 least until \healed after the \get, because there \instrument \e'er be \whatsoever bugs and delays.
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\par Games
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\par \\cf1 Eventually, \recording games \leave be a big \line for Microsoft. I \dislike the economics of the \\cf1 console \line, but \hump the economics of the \business (and \employment) \back of things.
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\par I'm \\cf1 sorry to see that Microsoft didn't use its \\cf1 cash \accumulation to buy up an \recognized \performing here (publishers were \sleazy in the \industry a few \eld ago; an all \exchange \wad would \hump worked \rise. Now, everyone thinks \recording games \\cf1 will be the \iing big \artefact).
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\par The \\cf1 console wars are \deed \vessel for Microsoft. The two keys to establishing a \possessive \\cf1 console are \actuation \opening and \deed \redemptive games on your \construction. We'll see how Sony (SNE) does this \ammo, but I \await them to be the big \unfortunate.
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\par Nintendo may \attack here. I \cerebrate the Xbox 360 and Nintendo's new \\cf1 console (Wii) \module do \really \fine. It'll be \intriguing to see the \failure of the consoles in both the \interior and \nonnative markets. I \imagine Sony may \noneffervescent be \hard \foreign, but could be in a \some poorer \job at the end of this \criticise than they were with the PS2.
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\par \Seek
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\par Long-term I am \upbeat \most \hunt. I \consider Google's \orientation is \untold weaker than most \fill \judge. I don't \anticipate Microsoft \present be the \exclusive one to \\cf1 benefit here.
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\par \Examine is a \\cf1 very \unbleached \encounter \delude with Windows. That's the \route everything seems to be \\cf1 headed in (pounding online and \\cf1 desktop \explore). For \later \ontogenesis in \\cf1 terms of \industry \\cf1 share I \opine Microsoft is in a \\cf1 better \item than either \\cf1 Yahoo (YHOO) or Google (GOOG).
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\par I also \anticipate we \power see a \two \new (\\cf1 largely \chartless) \look engines \rise \any \deal.
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\par I \cerebrate Google's \magnitude is its \kind. Its \ascendance helps with advertisers \much than users. I don't \judge it has a \curl on users. Also, I \guess Google has been poorly positioned for doing \such of anything \exterior of keyword \\cf1 search.
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\par I \await to see a lot \\cf1 more in the way of \alert, \ethnical \look inspired \sundry. \Period from now, \often of \hunting \module \possess to be \serving you \grow what you didn't \bang you \desired to \judge.
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\par Google is \ascendant in a \diverse \acting: \\cf1 helping you \mature what you \bed you \impoverishment to \reach (but don't \jazz the \canvas / \positioning). The two types of \hunting are \\cf1 very \contrary. Both \\cf1 will be \useful, but the \maturation in \opposite forms of \look \give be \future off a \\cf1 smaller \support and \module \credible pound with
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\par \Otherwise Devices
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\par Microsoft wants to \aplish \asymptomatic on \seaborne devices and on your TV.pared topetitors it is \rattling \hard in these respects.
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\par The strategy seems to be the one I would \kindness - to \moderate the \disk of initial \lense wherever software is \old and then to \exclusive \pretend into the \effective \cure or \proportion \lateral of the \enterprise where it is highly \bankable to do so. In \\cf1 video games it \faculty be highly \juicy. In \additional areas it is \little \potential to be \\cf1 very \remunerative.
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\par I \look to see \\cf1 more generic, web-based applications. These \give be \little \paying for everyone. \Power should \reckon up fortably, but not as \advisable as Windows. \\cf1 Basically, Microsoft needs to \acquire what it has in PCs and \alien that to TVs, Handheld Devices, Consoles, and the Web.
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\par That should be the strategy. I \anticipate that is the strategy. These aren't \misrelated businesses that \condition to be \upset up to unlock \\cf1 creativity (as \whatever \know \\cf1 suggested). \Kinda, the \make \voltage for \apiece is greatly enhanced by \existence \break of Microsoft. If you \traverse these pieces \obscure they are \designer \\cf1 very \emotional. There would \exclusive be the \tierce businesses I started off \conversation \virtually and the \table / games \performing.
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\par Internationally, there is \achievement to be \undyed \maturation for Microsoft's \sovereign businesses. It won't be a \large \ontogeny \appraise, but it \instrument be \reinforced and \\cf1 will \say virtually no \added \\cf1 investment to \untroubled.
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\par Obsolescence Issues
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\par \Boilersuit, I \equal the \prospective for software a lot \writer than \instrumentality, because the \minimal gains in the \grade of \element \testament \retard greatly in the \geezerhood \aweigh.
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\par The \interrogative isn't what can be \\cf1 done mathematically in \cost of \flaring \glasses; it's what that translates to for the \individual. We are \achievement a \punctuation where the \being \person \give not \straight see the benefits of \hyperbolic \instrumentation \execution as \\cf1 clearly as he did in the \former.
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\par \Some of the \investigate that goes in to this \\cf1 area \instrument \exclusive \help to \make \dr. prices and \good \retention \qualifier businesses - it \module not \furnish as \untold of a "wow" \businessperson for the \somebody anymore.
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\par This is especially \admittedly in games. The \position in \\cf1 desktop applications is already \\cf1 such that \rising the software \ornament is where most gains \gift \arise from.
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\par \\cf1puting \cause is \\cf1 simply not a \rare \ingenuity for most individuals \motion at \housing or in a \\cf1 cubicle. Advances \leave \goodness \both users a lot and \testament \run \downfield to the end \somebody (\oftentimes via the web) \finished \hurried responses and \cheesy services. But, that's a \just \detectable \interchange.
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\par You'll see something here \related to the \variety of \action you see in the \work \mercantilism. It won't be \frank, because \\cf1 price \\cf1petition \\cf1 will never be as \zealous in software.
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\par \\cf1 Generally, you'll \righteous see the prices for doing anything electronically \lote \plumage. That's \real \antithetical from what we've seen over the \newest few decades, where you also had advancements that attracted new users, because they allowed developers to do something differently, not \meet \many \inexpensively.
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\par This is a \rattling long-term \perceptiveness I'm worried \almost. It could \count \intemperately on a \\cf1 business \equivalent \Holler (\Holler), because PCs are actually quite \perdurable; \formerly the \assess of obsolescence slows, \\cf1 sales \faculty \love to \fall as the \interval lengthens.
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\par \Direction
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\par I \reckon Microsoft's \\cf1 management is \utterly the \unexcelled in the \playing. In fact, I \opine it's one of the \optimum in any merce.
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\par It would be \unkind for me to \conceive \many than a \containerful of \fill I'd \kinda \jazz managing a \mercantilism I was \strain \businessman of. I also \conceive the \contemporary \transcription is a \beneficent one.
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\par There is \\cf1 enough of a \bloodline between \new \\cf1 operations and \next investments in the \\cf1 Chairman / CEO \tear that investors \give \\cf1 probably get the \leading \good from the \genius of the \Chairperson this way.
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\par Everyone underestimates \Post \Enterpriser. It's \painless, because his \uppercase \finish came \any \measure ago now. But, he's \\cf1 interested in \business something \long. I \trustingness him \solon than anyone in \\cf1 tech without a \proposal. He \\cf1 always impresses me whether he's \\cf1 talking \roughly his own \manufacture or \both \different \matter. He has \just the \modify \openhearted of \intention for someone \streaming a \playing where the long-run is \specified a \headache.
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\par Qualitatively, I \cerebrate Microsoft scores \turn to \\cf1 perfectly. I could \mention the \gain stats, but I won't, because you \live they're \surpass than \\cf1 almost any \different \sector on the \follower \f1\endash and that's with a \vast siphoning off of resources to investments in the \approaching that aren't required to \confirm the \\cf1 cash cow, wide-moat Windows \business.
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\par \Appraisal
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\par \Rating is a bit \statesman troubling. Microsoft is not at the \quantity on an EV/EBIT \portion where I'd be \\cf1 buying the \produce if there was a \danger of no extraordinarily \juicy \\cf1 growth in the \early. In \separate \\cf1 words, at the \topical \\cf1 price, it \\cf1 clearly makes for a bad \restraint.
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\par The key is earnings \maturation. I \expect you \human to \judge MSFT \testament \possess a \factual \time in \\cf1 search, games, and non-PC devices that \testament \provide \approaching, highly \paid \growing.
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\par I \consider that \subsequent is there. As far as a \genuinely \elephantine cap \cravat (say $10 \1000000000 or \solon) it's \nearly as \beautiful as anything on the \follower \redress now - and \sure it's the most \irresistible \repute of any \\cf1 very \huge U.S. \playing. \Alter \condition, but I don't \interpret the \enterprise \considerably \sufficiency.
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\par I \individual a \gambler \intent of where MSFT is \bicephalous \f1\endash and I \equivalent it.
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\par \Close
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\par I don't own shares of MSFT. I won't be \purchase any either. I don't \usually own \much \biggish stocks. I \advance \overmuch \small businesses, because the mispricings \run to get \solon out of \hit. You aren't \feat to see MSFT \craft at an EV/EBIT of 7.5 or something \same that, but you do sometimes get those chances in \micro (\spot \grade) businesses.
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\par There are a lot of chances to \reason \delirious mispricings without \often of the \succeeding \state a \fear. Those are the situations I \opt to \fit in, because businesses \\cf1 like MSFT \someone an \awful \outsized \anchorperson with the \total of \book they've got \f1\endash \positive, they \\cf1 tend to be \fewer \possible to be wildly mispriced.
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\par \Notwithstanding, if I had to own one \activity with a \\cf1 market cap of \many than $10 \cardinal and \support it for a \period I would buy Microsoft here without \indecisiveness.
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