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Microsoft Behaving Badly


Redmond giant remains (really bad) investment.


Hello from New York, where I feel like Grandma Griswold's dog after the shaking and baking of this crazy week. Here's what I'm watching while I recover from the fact that I ever-so-briefly thought it was Saturday when I first opened my eyes this morning:

  • Microsoft (MSFT) is an investment position for me, rather than a trade. A really bad investment. The company continues to be less than the sum of its considerable parts (franchises and balance sheet power, to name two). Judging by the endless Yahoo (YHOO) saga and all the whining on last night's Microsoft conference call, it would seem my son, Superfly, has more emotional stability than Mr. Softie. Superfly is two years old; what's your excuse, Mr. Ballmer?

  • Google (GOOG) was a disappointment, as the company continues to do what aging companies do: Experience lagging growth and erratic results. Google is down 9% for the day and 30% for the year, and I continue to get furious emails every time I question the logic of a "one killer app and a fistful of profitless boondoggles like" business model.

  • I may not want to touch Google's stock long or short, but did provide me a touching backdrop as I sold some more of my beloved Goldman Sachs (GS) position this morning. Then I lightened the mood a bit and sold another block. (NB: Google's revenue generation for providing me with a profit-taking soundtrack: $0.00).

  • It's been pondered in this space before, but you can learn a lot about a guy based on whether he prefers Chaste Lacy Sandy or Naughty Leather Sandy. And if you don't like either version, well, that also says something about you.

  • On the topic of Naughty, Mattel (MAT) is rocking today on a good quarter and a property-rights ruling on MAG's line of Bratz dolls. Two thoughts: 1) It's good news for Mattel, but I still like Hasbro (HAS) (which I still own). 2) You'll see another 11-standard deviation move in the XLF before I buy my daughter a Bratz doll.

  • One thing sort of getting lost in the stank of Microsoft, bank write-downs, Intel (INTC) blahs and Advance Micro Devices (AMD) malaise: International Business Machines (IBM) is a tremendously well run company. It's worth noting that Microsoft grew into a juggernaut largely on the basis of IBM's lost opportunities. And Microsoft wasn't shy about mocking IBM along the way. It may take a while to catch up to you, but hubris is one deadly sin that's sure to bring you down if given enough time.

  • And with that, I'm outta here for a lunch meeting and my last trip to the NASDAQ. Be careful into the close. With the moves this week and what's sure to be a razor-thin tape, we could have some strange funk into the close.

    My advice (if we gave advice) would be to leave early, watch the Open and count your blessings, regardless of how your P&L turned out over these last few crazy days.
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Position in HAS, GS, MSFT

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