In this series, we suggest worthwhile reading material on a variety of topics, not all of which are directly related to investing. Is Value Investing Broken? – Gannon on Investing, November 9, 2016. Geoff Gannon argues that value investing is
At the turn of the century, few observers could have possibly foreseen that Microsoft would become a favorite bargain purchase for value investors in 2010. The dot com boom was in the process of peaking and any company even vaguely associated with software or technology traded at stratospheric multiples of earnings. Ten years later, Microsoft is statistically cheap but is it a great potential investment or a classic “value trap”? Read this article for one opinion.
When Bill Gates promoted Steve Ballmer to the chief executive position at Microsoft over ten years ago, the company was flying high in terms of investor perceptions and had a cutting edge image placing it at the forefront of America’s high tech boom. Despite initial setbacks during the mid 1990s related to understanding the transformative power of the internet, Microsoft quickly recovered and expectations for the company’s future were very high in early 2000. Fast forward one decade: Today, Microsoft is perceived as a stodgy company that may still generate a great deal of cash but is hopelessly behind the technology curve and may be destined for inevitable decline. Is this a fair portrayal and, if so, to what extent is Mr. Ballmer to blame? Read this article for an opinion.
Apple has overtaken Microsoft to claim the number two spot in the ranking of American companies as measured by market capitalization. At $222 billion, Apple only trails Exxon Mobil which has a $279 billion market cap. Microsoft’s market capitalization fell today to $219 billion. What does this mean and are there any lessons that investors can learn by Apple’s amazing rise over the past decade? Read this article for more details.
Microsoft and Yahoo! entered into a landmark search deal in late July and many observers credited Steve Ballmer with a major strategic victory, particularly given the richer terms of his prior offers to acquire Yahoo! in early 2008. While the arrangement does appear to give Microsoft much of what it wanted from Yahoo! without the massive costs of an outright acquisition, Yahoo! may have captured the best deal they could have under the circumstances. After all, as Yahoo! CEO Carol Bartz points out in the CNBC interview shown below, one cannot go back to the conditions that prevailed in early to mid 2008 and decisions have to be made based on current realities.