“Is now the time to jump into MSFT now that it is trading above its 30 day MA?” That was the question presented to me recently.
Before I go into the answer I wanted to take a moment to introduce myself. I am a regular poster over at HipEgg. On that site I post under the pen name Jym Khana. My real name is Kevin Hamrick and I have been involved in investing for, well, many years. I even spent a very little time working for a couple of the big brokerage facilities. Regardless of that fact, everything I am presenting is only my opinion. I am no longer working with or for any financial institution and if I post on a stock that I own I will make that clear. In this case, I don’t own any MSFT stock.
We are all probably cursed by having lived through the .COM boom & bust. The last time we saw such a market was back in the 20’s but fortunately, as painful and quick as the ride down was for us we still weathered much better then our grandfathers.
I say that we were cursed because now we still tend to see technology stocks as the great investment. In reality some are, but just because a company makes software doesn’t make it a better buy then a company that makes generators. With that being said, I probably have too many tech stocks in my portfolio because it is a sector I am comfortable with.
MSFT is one of those safe suggestions for a broker. Everyone knows the company, they all have heard how MSFT employees retired rich off of their stock options and so everyone still wants a piece. It’s the same security of name brand recognition which drives investors to invest that drives IT managers to recommend MSFT to CEOs. So should we be getting in today?
The market is an erratic place at times. Stocks go down because unexpected good news wasn’t better news. Stocks go up after some horrific news because investors think it can’t get any worse. Fortunately those are not the norms. How will the market interpret MSFT’s news? Have we seen the last delays of the next OS release? Maybe it is good that they are delaying, maybe it is a signal to customers and skeptics that they are going to get it right the first time. How about the money they are pledging to spend to fight the Google Monster? Is this good that they are willing to take an aggressive stance and invest capital to stay competitive?
I have to say, I am a conservative investor and at this time I still see no compelling reason to be playing with MSFT. I don’t think that we have necessarily seen the worse from this company. There is still a good possibility that it could go lower as the downtrend is still in place. I am staying clear for now and when I see something more positive I’ll reconsider my position.
Best of luck