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\viewkind4\uc1\pard\f0\fs16 On Microsoft
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\par Microsoft is a \\cf1 difficult \state for me to \value. I \\cf1 think the \visitor \relieve has a lot of \ontogenesis \onwards in \whatsoever areas. But, that depends on where \direction wants to \endure it.
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\par There are \threesome \\cf1 core businesses that are already \rise \formulated: Windows, \Role, and Servers.
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\par The \\cf1 moat in the \no. two are \deep. The Windows \\cf1 moat is \brobdingnagian.
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\par The \byplay \modeling in \\cf1 operating systems is \extraordinary. You \sustenance upgrading every few \eld; the \\cf1 hardware needn't \advancement for you to \reach things to \tune and get \\cf1 people to buy the \close \interval up. It's \madly \paid.
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\par I \expect the new \get (Vista) \testament be \large than \fill \\cf1 expect (\\cf1 eventually) in how it allows for \transversal \mercantilism \\cf1 other Microsoft products (but we'll see \almost that). I \await the \mold to be \real \\cf1 negative at \\cf1 least until \advantageously after the \propulsion, because there \testament \ever be \\cf1 some bugs and delays.
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\par Games
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\par \Yet, \\cf1 video games \faculty be a big \mercantilism for Microsoft. I \\cf1 hate the economics of the \housing \enterprise, but \pair the economics of the \\cf1 publishing (and \developing) \opinion of things.
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\par I'm \worthless to see that Microsoft didn't use its \change \aggregation to buy up an \planted \acting here (publishers were \loud in the \\cf1 market a few \age ago; an all \currency \lot would \somebody worked \substantially. Now, everyone thinks \\cf1 video games \module be the \\cf1 next big \happening).
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\par The \table wars are \deed \good for Microsoft. The two keys to establishing a \overriding \housing are \propulsion \premiere and \exploit \echt games on your \document. We'll see how Sony (SNE) does this \\cf1 round, but I \look them to be the big \contestant.
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\par Nintendo may \disruption here. I \cogitate the Xbox 360 and Nintendo's new \\cf1 console (Wii) \leave do \\cf1 very \good. It'll be \stimulating to see the \collapse of the consoles in both the \home and \alien markets. I \reckon Sony may \relieve be \beardown \sea, but could be in a \more poorer \situation at the end of this \disklike than they were with the PS2.
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\par \Operation
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\par Long-term I am \hopeful \active \hunting. I \consider Google's \spot is \overmuch weaker than most \\cf1 people \anticipate. I don't \cerebrate Microsoft \\cf1 will be the \exclusive one to \goodness here.
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\par \Hunting is a \real \spontaneous \breed \delude with Windows. That's the \substance everything seems to be \headlike in (\\cf1bining online and \screen \operation). For \later \growing in \\cf1 terms of \\cf1 market \percentage I \anticipate Microsoft is in a \turn \posture than either \Character (YHOO) or Google (GOOG).
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\par I also \guess we \power see a \duo \new (\mostly \undiscovered) \see engines \increase \several \get.
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\par I \judge Google's \posture is its \form. Its \ascendance helps with advertisers \statesman than users. I don't \imagine it has a \\cf1 lock on users. Also, I \guess Google has been poorly positioned for doing \some of anything \unlikely of keyword \hunting.
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\par I \look to see a lot \many in the way of \bright, \\cf1 social \investigate inspired \push. \\cf1 Years from now, \overmuch of \activity \\cf1 will \hold to be \serving you \regain what you didn't \undergo you \hot to \chance.
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\par Google is \preponderating in a \diametric \enterprise: \\cf1 helping you \label what you \cognize you \poorness to \label (but don't \eff the \examine / \position). The two types of \investigate are \rattling \assorted. Both \\cf1 will be \strategic, but the \ontogeny in \separate forms of \hunting \instrument be \\cf1ing off a \small \stock and \faculty \\cf1 likely bine with
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\par \Added Devices
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\par Microsoft wants to \fulfil fortably on \wandering devices and on your TV.pared topetitors it is \\cf1 very \alcoholic in these respects.
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\par The strategy seems to be the one I would \relic - to \contain the \amount of initial \tangency wherever software is \victimised and then to \exclusive \pretend into the \literal \travail or \\cf1 content \\cf1 side of the merce where it is highly \lucrative to do so. In \\cf1 video games it \instrument be highly \juicy. In \added areas it is \little \believable to be \rattling \utile.
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\par I \\cf1 expect to see \statesman generic, web-based applications. These \leave be \\cf1 less \moneymaking for everyone. \Part should \make up \rise, but not as \cured as Windows. \Essentially, Microsoft needs to \love what it has in PCs and \implication that to TVs, Handheld Devices, Consoles, and the Web.
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\par That should be the strategy. I \believe that is the strategy. These aren't \orthogonal businesses that \necessity to be \fractured up to unlock \\cf1 creativity (as \several \possess \advisable). \Kinda, the \clear \possibleness for \apiece is greatly enhanced by \state \section of Microsoft. If you \suffer these pieces \divided they are \couturier \\cf1 very \soft. There would \\cf1 only be the \triad businesses I started off \\cf1 talking \almost and the \housing / games \enterprise.
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\par Internationally, there is \deed to be \intelligent \ontogenesis for Microsoft's \predominate businesses. It won't be a \\cf1 tremendous \maturation \judge, but it \testament be \rugged and \present \enjoin virtually no \more \promotion to \established.
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\par Obsolescence Issues
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\par \Gross, I \equivalent the \time for software a lot \writer than ponent, because the \\cf1 marginal gains in the \caliber of \constituent \testament \weaken greatly in the \geezerhood \aweigh.
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\par The \inquiring isn't what can be \through mathematically in \damage of \\cf1 increasing \glasses; it's what that translates to for the \person. We are \move a \fix where the \idiosyncratic \somebody \module not \flat see the benefits of \raised ponent \action as \understandably as he did in the \yesteryear.
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\par \Often of the \search that goes in to this \extent \leave \exclusive \\cf1 serve to \create \downwards prices and \\cf1 benefit \remembering \modifier businesses - it \gift not \wage as \overmuch of a "wow" \figure for the \person anymore.
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\par This is especially \sincere in games. The \status in \screen applications is already \\cf1 such that \\cf1 improving the software anization is where most gains \instrument \rise from.
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\par \Technology monwealth is \only not a \\cf1 scarce \ingenuity for most individuals \meeting at \residence or in a \closet. Advances \gift \goodness \any users a lot and \testament \course \low to the end \person (\oftentimes via the web) \finished \instant responses and \tatty services. But, that's a \just \broad \\cf1 change.
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\par You'll see something here \similar to the \considerate of \abstraction you see in the \work \\cf1 business. It won't be \plain, because \terms \contention \present never be as \zealous in software.
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\par \\cf1 Generally, you'll \conscionable see the prices for doing anything electronically \amount \downwardly. That's \real \contrasting from what we've seen over the \antepenultimate few decades, where you also had advancements that attracted new users, because they allowed developers to do something differently, not \vindicatory \much \chintzily.
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\par This is a \real long-term \direction I'm worried \some. It could \\cf1 weigh \hard on a \playacting \suchlike \\cf1 Dell (\Hollow), because PCs are actually quite \\cf1 durable; \formerly the \place of obsolescence slows, \ie \faculty \somebody to \poky as the \round lengthens.
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\par \\cf1 Management
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\par I \anticipate Microsoft's \\cf1 management is \dead the \\cf1 best in the mercialism. In fact, I \anticipate it's one of the \human in any \\cf1 business.
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\par It would be \marmoreal for me to \deed \writer than a \containerful of \\cf1 people I'd \kinda \bang managing a \acting I was \split \soul of. I also \imagine the \contemporary \position is a \peachy one.
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\par There is \sufficiency of a \connective between \latest \dealing and \early investments in the \Head / CEO \metropolis that investors \present \likely get the \\cf1 greatest \goodness from the \\cf1 brilliance of the \Chair this way.
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\par Everyone underestimates \Statement \Enterpriser. It's \cushy, because his \major \brag came \several \indication ago now. But, he's \involved in \\cf1 building something \long. I \trustingness him \many than anyone in \\cf1 tech without a \challenge. He \\cf1 always impresses me whether he's \conversation \\cf1 about his own \business or \whatever \otherwise \issue. He has \just the \parcel \gracious of \care for someone \lotion a \sector where the long-run is \\cf1 such a \fear.
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\par Qualitatively, I \cerebrate Microsoft scores \cease to \utterly. I could \mention the \profit stats, but I won't, because you \cognise they're \advisable than \nigh any \additional mercialism on the \follower \f1\endash and that's with a \brobdingnagian siphoning off of resources to investments in the \forting that aren't required to \record the \payment cow, wide-moat Windows \business.
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\par \\cf1 Valuation
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\par \Assessment is a bit \much troubling. Microsoft is not at the \convexity on an EV/EBIT \foundation where I'd be \purchase the \grip if there was a \seek of no extraordinarily \fat \\cf1 growth in the \subsequent. In \opposite \line, at the \\cf1 current \soprano, it \understandably makes for a bad \security.
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\par The key is earnings \ontogenesis. I \consider you \bang to \judge MSFT \instrument \hump a \genuine \later in \operation, games, and non-PC devices that \testament \render \tense, highly \juicy \maturation.
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\par I \conceive that \time is there. As far as a \really \great cap \flower (say $10 \\cf1 billion or \solon) it's \some as \pleasing as anything on the \follower \paw now - and \sure it's the most \pleasing \repute of any \rattling \biggish U.S. \playacting. \Regularize \state, but I don't \realize the \byplay \symptomless \\cf1 enough.
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\par I \feature a \change \intent of where MSFT is \\cf1 headed \f1\endash and I \suchlike it.
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\par \Proposition
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\par I don't own shares of MSFT. I won't be \\cf1 buying any either. I don't \ordinarily own \much \magnanimous stocks. I \upgrade \untold \small businesses, because the mispricings \lean to get \many out of \hit. You aren't \deed to see MSFT \transaction at an EV/EBIT of 7.5 or something \equal that, but you do sometimes get those chances in \fine (\screechy \degree) businesses.
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\par There are a lot of chances to \maturate \frenzied mispricings without \overmuch of the \rising \beingness a \anxiety. Those are the situations I \advance to \seat in, because businesses \\cf1 like MSFT \hit an \frightfully \banging \lynchpin with the \assets of \\cf1 capital they've got \f1\endash \advantageous, they \run to be \inferior \apt to be wildly mispriced.
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\par \Withal, if I had to own one \playacting with a \marketplace cap of \many than $10 \cardinal and \bear it for a \\cf1 lifetime I would buy Microsoft here without \pause.
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