goldfinger

Here is an interesting link showing that iCloud actually uses MSFT's cloud service :) http://www.redmondpie.com/guess-what-icloud-uses-windows-azure-services-for-hosting-data/ Thanks that was a good article. Apple is dead focused on user experience.

Exactly! Moreover local computing power will still be needed for many applications...

The need for local resources/local software/local computing power won't disappear. Data won't be fully software independent. In reality we will have a combination of local, hybrid and purely remote applications and types of use and we will have different types of topologies exactly like today. The cloud extends current paradigms more than redefines them. So yes all these companies are trying to preserve their moats in the new mix and there is room for most of them. What is interesting with Microsoft is the convergence opportunities coming from legacy + all areas where it is present even if late to the party at times. The deal with Comcast + XBox + Skype is a young example of that. goldfinger, You are certainly aware of the converging of voice, video, and data to internet protocol. The cloud will be the computer, APPS will be the software for the dumb devise, and content will be delivered over one network connecting us all. Skype/voice + Microsoft/video + Level 3/data delivery = one network connecting us all Ben Graham, Thanks for you input. I am aware of all this because I design software technologies myself, cloud related or not. It just is a bit more complex than that!

The need for local resources/local software/local computing power won't disappear. Data won't be fully software independent. In reality we will have a combination of local, hybrid and purely remote applications and types of use and we will have different types of topologies exactly like today. The cloud extends current paradigms more than redefines them. So yes all these companies are trying to preserve their moats in the new mix and there is room for most of them. What is interesting with Microsoft is the convergence opportunities coming from legacy + all areas where it is present even if late to the party at times. The deal with Comcast + XBox + Skype is a young example of that.

You are totally right about that. However as a general comment, thinking that Microsoft is where it is because of innovation is not accurate.

Do you still own some C and BAC?

Let's see... Gates learned a few things for Buffett and is a major holder of MSFT. He probably (along with other friends at Microsoft) is very instrumental in the buyback thing. In the last 3 quarters 11B$ were spent on buybacks. To me it did increase his ownership of MSFT well in excess of the stocks he sold this year. MSFT has showed its willingness to give special dividends instead when appropriate.

What about the buybacks?

He is a very poor judge of Gates if he thinks a little publicity will get Ballmer out. Gates has a high amount of integrity and won't make a move like that just to please a small-time hedge fund manager that is just in it for a trade. Gates is a very good judge of character, for example he has said that Buffett is his best friend. Speaking of his character, the MSFT board says something good about BofA. The CFO is on the Microsoft board, somebody looking at BofA might like to know that, because as a "black box" it's nice to know that the CFO reporting the numbers is somebody that Gates trusts. Thanks Ericopoly. Yes this is very useful to know.

I think he is right. I have not been too impressed by Einhorn lately...

Stephen Roach's view: http://www.project-syndicate.org/commentary/roach5/English

very nice thanks.

Another article based on insiders' views where a few points are made that corroborate Jim Rogers points: - There are multiple real estate markets with different price levels. Shanghai is one of the most expensive. - Leverage for buyers is not as high as feared. In many cases most of the transactions are in cash. - The risk is in the property developers camp. There will be bankruptcies in this sector. - Property development loans share is 7% of the total. http://blogs.forbes.com/kenrapoza/2011/05/08/afraid-of-china-real-estate-bubble/

Java had decent success in the server area. As long as you can buy hardware power and you only develop functional areas (like ERPs and back-end) java is OK. It is cheap comparatively speaking to developing in C/C++ because most developers find it hard and you have to handle low level issues. Java + Jboss etc...are bundled for Linux. When you want to develop packaged software that has high performance or needs low-level OS specific (or so) technologies or both Java totally sucks. Plus .NET is now the real alternative for server developments.

I am sure Ballmer and Bill talk very often about big decisions and next steps. It is like Ballmer is the eminence grise in there. Einhorn is a hedge fund guy. He wants to fire up the stock price quickly.

Look at earnings they may get now close to 2.50$/2.70$ for the year. The PE is going to look rather small for a company with growth in earnings, an aggressive pipeline of new products and 45B$ in cash or so. It will get even more so that they are buying back stocks like nuts (10.8B$ in the last 3 quarters). You would get to PEs of in between 9 and 7 or so end of year depending on how you account for the cash. That looks rather like depression valuations now for this company and if they show that they'll be around for a while longer (which the pipeline seems to indicate) then I believe the market will correct this inefficiency rather quickly. The stock went to 32$ last year and corrected again. But that's not uncommon. Look at Gillette's stock price when Buffett bought it for example. I could not see that kind of articles in the last few months: http://money.msn.com/stock-broker-guided/latest.aspx?post=622d65f2-1b5b-4305-a9b7-a3ef70115fa9 too. That may be telling us something.

Also around me I am seeing everybody buying the XBox360 with Kinect even though they already own a PS3 or a Wii. Imagine the convergence capabilities with all those technologies.

Totally. I think the strategy behind Yahoo+Facebook+Bing can allow MSFT to gain traction online too (most users I know go to Yahoo + Facebook, all they need is an integrated search engine and be told to use it). And they signed lots of big federal and institutional contracts with their cloud technology too. Noticeable that the city of San Francisco signed (at the door of the Silicon Valley).

I whittled down my initial list of tech large cap to those three, after first getting excited about a much larger bunch of them. I like GOOG and APPLE, but they need to double if not triple earnings just to get to where HPQ is today. I'd rather already be there. It seems we both like cheap girls! ;D

GMO made a study recently and concluded that small to mid caps are wildly overvalued. You just names my three darlings! I have in the money puts on IWM. I figure I'll make money both on my large cap positions as well as on that hedge. MSFT, DELL, HPQ -- the P/E are 1/2 of that index.

GMO made a study recently and concluded that small to mid caps are wildly overvalued.

I don't dispute the inherent advantage of taking a hands on approach to understanding the issues. However it was more this statement that prompted me to comment "It is easy to look at China’s construction boom, and the real-estate market there, and compare it to what has happened in the US, Dubai or Japan but in reality the market is very different. Spending on infrastructure has a purpose, the trend is towards rising incomes and increased spending power, and property buyers are not exposed to anywhere near the level of risk that led to collapses elsewhere." I too hope China hasn't succumbed to significant misallocation of capital under the guise of GDP growth. Thanks for posting the article. Got you. Agreed. It probably has mis-allocated some. But may be not to the level described by Chanos. I have no doubt that China will hit serious road blocks on the way.

His explanations converge a lot with many things Rogers say about China (Rogers traveled to China when it was barely opening to the west): - they both say that over-construction has always (for more than 25 years now) happened in China: build first relocate later. - they both say the same about leverage and real-estate. - they both say that mostly the rich can play the high-end real-estate game. Rogers said that resource constraints and particularly water may endanger the Chinese story. Right now it seems they are running into all sorts of energy related issues.

Not at all. It is about understanding what is happening there before producing ideas and forecasts. I would tend to believe that things will go bad when they need to really tighten. For now I have problems believing they are saturated like we used to be during the housing bubble.

Since Chanos and company are forecasting an imminent crash for China that will make USSR's collapse look like a walk in the park, I wanted to post an article from a guy who knows the place quite well and who has a different view: http://www.cnbc.com/id/43131260?__source=yahoo|headline|quote|text|&par=yahoo