Palantir Wrote: ------------------------------------------------------- > Jscott24 - There is nothing wrong with sitting on > a huge cash pile and doing nothing with it. It is > much better than overspending on an acquisition > using that huge cash pile. If there are no good > opportunities, you should sit there and do > nothing. Not in this environment; anyone just watch that GOOG/MA event?
Jscott24 Wrote: ------------------------------------------------------- >anyone just watch that GOOG/MA event? You mean the GOOG/MA/C event?
Palantir Wrote: ------------------------------------------------------- >If there are no good opportunities, you should sit there and do > nothing. Huh, I’d prefer a return of cash to shareholders.
brain_wash_your_face Wrote: ------------------------------------------------------- > Palantir Wrote: > -------------------------------------------------- > ----- > >If there are no good opportunities, you should > sit there and do > > nothing. > > Huh, I’d prefer a return of cash to shareholders. That’s what they did 10 years ago when they paid their special dividend. That’s the last time it paid to own MSFT. There are just too many good tech stories out there right now to justify buying MSFT. Hell, even AAPL is only trading at 16x trailing earnings.
Sweep the Leg Wrote: > That’s what they did 10 years ago when they paid > their special dividend. That’s the last time it > paid to own MSFT. > Nah, that was in 2004. I hear you on AAPL…I recommend both. Very different theses, very different drivers (consumer vs. enterprise), good diversification.
brain_wash_your_face Wrote: ------------------------------------------------------- > Palantir Wrote: > -------------------------------------------------- > ----- > >If there are no good opportunities, you should > sit there and do > > nothing. > > Huh, I’d prefer a return of cash to shareholders. If you do not trust them to make good investments with the money and instead pay it out to you, why would you even own the stock?
Palantir Wrote: ------------------------------------------------------- > If you do not trust them to make good investments > with the money and instead pay it out to you, why > would you even own the stock? Hello, is this thing on? This may be a troll, but I’ll bite. Some points: 1) It is not a matter of them making good investment decisions. This is not Berkshire, it is Microsoft. In terms of organic growth, MSFT’s last effective launch was the XBox. MSFT has been past its rapid growth phase for a while and continuing to grow at that pace is very difficult. I absolutely do not trust them to make good investment decisions, as investing was never a criteria for MSFT management. Sometimes management needs to accept the lifecycle of their company, rather than lie to themselves and shareholders by believing they can maintain elevated growth forever. 2) Dividends pay me cash. In the current low yield environment, why wouldn’t you want this? 3) MSFT declaring a recurring dividend would be a strong signal of continuing stability of cash flows. So, I would prefer a dividend to a share repurchase unless they diseminated (sp?) a detailed, long term repurchase program. 4) This is a value play, not a growth play. I am not buying the stock because I think Windows is going to get really big and Skype is going to revolutionize communication. I am buying it because I think the stock is undervalued and a dividend would be a good first step in narrowing that value gap. Best, bwyf
In case you are not just being a prick and you truly don’t get it: - MSFT’s core businesses are expected to decline in the future, that is MS Word and Office are likely going to be challenged by cheaper or even free competitors, and thus MS’s margins are going to decline. This is going to require investment, that needs money. - When you invest in a company that’s expected to be a going concern, you’re investing in their managment to take the company assets and provide a good return on them. And if you don’t trust the management to invest properly, then you should not own their shares. This may not be a “growth” industry but this industry is always changing and companies need to keep reinventing themselves to survive. Technology is a dynamic business where your edge can be eroded due to technology and you need to constantly keep making new acquisitions and you need a CEO gifted enough to steer the ship. And if you buy a stock just because it’s undervalued and it has poor prospects in the future, it’s called a value trap, not a value investment.
Palantir Wrote: ------------------------------------------------------- > In case you are not just being a prick and you > truly don’t get it: > > - MSFT’s core businesses are expected to decline > in the future, that is MS Word and Office are > likely going to be challenged by cheaper or even > free competitors, and thus MS’s margins are going > to decline. This is going to require investment, > that needs money. > > - When you invest in a company that’s expected to > be a going concern, you’re investing in their > managment to take the company assets and provide a > good return on them. And if you don’t trust the > management to invest properly, then you should not > own their shares. This may not be a “growth” > industry but this industry is always changing and > companies need to keep reinventing themselves to > survive. > > > Technology is a dynamic business where your edge > can be eroded due to technology and you need to > constantly keep making new acquisitions and you > need a CEO gifted enough to steer the ship. And > if you buy a stock just because it’s undervalued > and it has poor prospects in the future, it’s > called a value trap, not a value investment. All of this is priced in.
Palantir Wrote: ------------------------------------------------------- > Meeeeooow. So I have this straight, are you saying… 1) that no company should ever pay a dividend or 2) that nobody should invest in a company that pays a dividend. Lame discussion, I’ll let the market decide.
If there would not be a problem there would not be hidden value or value trap. It’s for each investor to decide which it is. With a company as big as msft you can argue that they are big enough to buy the next big thing, they can finance it with the cash flows for the current operations. Plus there is a stickiness that exists with using their product - I think the cost of using excel for example is not a problem for corporations, versus them switching to a different system that could create potential compatibility problems.