Microsoft stock

I have tentatively decided to put 100% of my non-cash investment money into Microsoft stock (MSFT).

This decision is not based on any inside information or any short-term market considerations, but given that the stock has been beaten down so excessively over the past two months without due consideration of long-term economic and business factors, it does seem like a rather attractive entry price, to me. My decision would probably be the same even if the stock hadn't been beaten down, but the lower price makes the decision even easier.

A year from now I will review this decision and decide whether to diversify. I expect that I'll continue this path next year, but it always makes sense to periodically review decisions. One decision that could well change every year is to buy or sell stock to maintain a desired asset allocation.

I will be accumulating a fair amount of company stock by maxing out by contribution to the company employee stock purchase plan (ESPP) at 15%, putting 100% of my Roth 401(k) money into company stock, and restarting a small monthly dollar-cost averaging investment plan with ShareBuilder that will put 100% into Microsoft stock. I'll also be getting a small amount of company stock vested each year for the next five years from a stock "award" that I received with my employment.

I'll be saving as much cash as I can as well for a "rainy day" fund. That will constitute my "diversification", for now. Two years from now I would expect to have 25% of my assets in cash and 75% in Microsoft stock.

Putting all of your eggs in one basket (or even 75% of them) is always risky, but excessive diversification can be risky as well. Having a lot of different investments waters down the amount of attention that you can give to any individual attention, raising risk due to lack of focus.

I have a lot of confidence in the future of the company and I will have a dual interest in making sure I continuously evaluate the company's prospects: to protect my investment in stock, and to protect my investment in my career and source of employment income.

Years ago (back in 1992) I bet 100% of my retirement fund on Microsoft... the sock promptly went down 25% over the next year... but then rose by 700% over the next six years. I have no expectations as to the stock performance over the next ten years, but I don't feel more confident in any other company (including that other "search" company) or investment asset class over the coming ten years.

I am not making a stock pick or recommendation for other investors (or traders or speculators), but simply elaborating on my own thinking and decisions. Each investor should consider the available data and make their own investment decisions.

Please write to me... not to tell me your stock "picks", but tell me the company or companies that you really want to work for (over the long term) and belive would provide the best career and income opportunities (over the long term). If a company is a great career investment for the long-term, it might just be a great financial investment.

BTW, I am thoroughly enjoying my new job, even after many years of being self-employed.

-- Jack Krupansky