Learning to Love Microsoft (Stock)

Over the last few months I have written a few pieces over on RealMoney saying nice things about Microsoft’s stock. The latest quarterly earnings from the company are a nice capstone to all of that.

The company’s stock is up almost 14% since late March. It had tumbled to $24 on worries about the company’s EU settlement, and it is now back at $27.50.

My argument back in March was orthodox contrarian thinking, as far as it went. Everyone hated Microsoft at the time, but the dislike hit a kind of peak with the news that Microsoft would have to pay the EU a hefty chunk of change.

But how much worse could it get? After all, Microsoft had settled with the EU, and it was showing new eagerness to settle with everyone in sight. At the same time corporate IT spending is showing some signs of strength, so Microsoft was almost certainly going to post a good quarter or two.

And that is what has since happened, much to my pleasure. While investing is never easy, it is satisfying when a contrarian posture works in your favor.

Related posts:

  1. My NatPost Column on Microsoft
  2. Microsoft & its FAT Problems
  3. From Eisner with Love
  4. Presidential Cycles and Stock Returns
  5. Siegel vs. Arnott: The Stock Market Debate