Saturday, April 25, 2009

What's next for Microsoft stock?

Is the worst over and Microsoft stock finally poised to bounce back?

Was the 10% bounce in Microsoft merely freakish short-covering, a "short-squeeze", with the stock likely to "give it all back" in the coming days and weeks?

Is Microsoft stock just trading in a range ($16 to $21?) and now likely to head back down in that range now that it is bumping into the top end of the range?

Are happy days here again?

Are we simply in the calm eye of a larger storm and more pain is just ahead?

Exactly what role are hedge funds and proprietary in-house trading at the major financial firms playing in the volatility of Microsoft stock?

Alas, I do not have any solid answers to any of these questions.

I still hold a significant position in Microsoft stock and have no intention of "selling into the rally" or engaging in short-term trading (or buying any more other than reinvesting dividends), but I simply do not have access to the kind of investment flow data that would answer any of my questions.

So, I am unable to offer any advice as to whether Microsoft is a "buy" or "sell" or even a "hold" in this very dynamic market. Sure, I am a "hold", but I am a long-term investor and not a short-term trader or speculator.

If you do have any answers, real answers and not just opinions and overheard chatter and half-baked "analysis" and "recommendations" from any of the quacks (especially CFA) on and off Wall Street, I'd surely love to hear them, but for now the only thing (for me) to do is sit back and watch events unfold. And... continue to collect the dividend checks. The dividend yield is down to 2.49%, but that is still better than most savings, money market, CD, and money fund yields.

-- Jack Krupansky

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