So, I bought a stock this past week. Microsoft (NASDAQ: MSFT). I was pretty happy about the purchase. Well, strike that. I was sort of happy about the purchase. I don't have to tell you why I hastily added that qualifier. The current recession, quite frankly, is unlike any genus of recession we've seen before. A new taxonomical category needs to be reserved for it, and subsequently studied, so that we may learn to recognize the damn beast the next time it begins to rear its ugly Cloverfield-like head on the financial landscape. Ergo, it's scary to put money down on anything.
But Microsoft seems to be holding up fairly well as of late. And I'm glad that its bad earnings report is out of the way. I bought some shares at $19.30. I'm a little down right now, but I'm hoping that I can get maybe a dollar move out of this position (I might even settle for a little less than that, actually). Yes, I do think Microsoft is most likely a good longer-term bet, but I frankly was looking for the safest trading vehicle I could find. I'm more than certain I didn't find such an ideal concept, but here's my thinking: Microsoft's stock has a decent yield, the company generates a ton of cash, the shares have bounced off their lows, and I figure there's a possibility that I can get an opportunity to sell on a nice intraday move when market sentiment is, at least temporarily, giddy and bullish. Hey, even in a recession as raging as Bill O'Reilly's temper, you get those days.
But then look at what happens. Microsoft pulls a stupid, stupid move. It wants to open retail stores and be like Apple (NASDAQ: AAPL)? No, I'll refrain from going into that subject since there's already been a lot of negative opinion on it. And who knows, maybe Microsoft is right to get into retail and the rest of us are wrong.
My bigger concern was how the news would affect the stock price. So far, everything seems to be all right on that front. I don't really think it'll have much effect on the stock right now. If it goes down from here, it probably will be for other reasons. I just hope there isn't a lot of news flow on the retail initiative because, again, I think it is a goofy idea.
Will I do well on this trade? I hope so, I've had some losses in '08. Thing is, I want to remain disciplined and get out according to my sell price. It would be tempting to own Microsoft, especially if it started to rise rapidly. Unfortunately, what goes up usually goes right back down in this market.
Disclosure: I own Microsoft; positions can change without notice.
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Reader Comments (Page 1 of 1)
2-14-2009 @ 3:45PM
Bryant said...
haha, you bought in at 19.30. You probably bought the shares I bought at 18.75 and stop-lossed at 19.30 :P
I'm thinking Microsoft will probably hover around the $19 mark until the end of the recession (whenever that is), so it's worth holding on to, even if you bought my shares at 19.30.
2-14-2009 @ 4:24PM
gjsaumat said...
Bryant... you're a real diq!!!!!
2-14-2009 @ 11:59PM
Beltway Greg said...
No, MSFT's 5-year return -28%. Even when the economy is good MSFT is bad. Purchase a beaten down utility and call me in five years.