Company Review - Why Buy Microsoft Stock

For Investors in the Stock Market Who Look for Value, Microsoft is a Good Buy at Its Current Price

There's a very simple reason Microsoft (MSFT) is a bargain at its current price: only geeks speak Latin.

Say what you want about the superiority of Unix. The awesome server capability of Linux. The ease of a Macintosh. To the average user these operating systems might as well be coded in a dead language. Your every day John Smith wants to learn only enough to be able to jump on the back of a
 giant hay truck trundling down the information highway, not ratchet a street legal Ferrari through a ten gear stick on the Autobahn.

Let's forget all of Microsoft's peripheral interests such as the Xbox and get down to the core issue that represents long-term value—software.

For our purposes think of Windows as a central belief system with the power to adapt itself to any common tongue. I'll explain.

In the 1500s the Catholic Church lost its stranglehold on the Christian faith because wouldn't give up on Latin. There was a major problem with their software: only the intellectual elite could understand the code. Parishioners didn't understand a single word and had no way to read their holy book, the early day equivalent of the internet. Unrest brewed.

When the Protestant Reformation hit Europe like a fat kid cannonballing into a swimming pool Christianity experienced resurgence in popularity. Suddenly people could jump into the details of their religion, the giant hay truck of its day, because it adapted itself easily to their native language, the personal computer.

This is the same kind of power drives the former, current, and future success of Windows as an operating system and Microsoft as a company. Yes, you can format your hardrive to speak difficult languages, but do you really want to go through all the trouble to learn it?

Related information
  • 97% of the world's computers still run on Windows.
  • By 2010 there will be at a total of 1.3 billion computers in the world.
  • Microsoft has $43 billion in cash.
 
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Hey Jewel. Indeed investing can be intimidating at first. However, over the long run, the stock market is proven to be less risky and deliver better returns than any other form of investment (such as US Bonds, a savings account, stuffing the mattress, etc.) However, in the short term, the stock market is very risky. You profit from the market by putting your money in for a minimum of 5 years in a company with solid fundamentals (good cash flow, no debt, a competitive advantage over other industry peers) much like Microsoft, and you have an extremely good chance at earning a very good return on your money. If you want to learn more about investing, I'd recommend the Motley Fool (www.fool.com) as a good place to start. I may start publishing some investing articles for beginners as well.

Posted on 11/05/2006 at 10:11:00 AM

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