quote.fool.comToday's FeaturesQuotes, News, Charts, Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   
Free Home Delivery!

Cash-King Port

The Cash King Portfolio has been renamed the Rule Maker Portfolio.

Report
Archives
Information
Messages
Companies Messages

11 Steps:
 1: Philosophy
 2: Mastering Finances
 3: Allocating Savings
 4: Finding Ideas
 5: Getting Information
 6: Cash-King Criteria
 7: QuaVa & Flow
 8: Ownership
 9: Putting It Together
10: Retirement
11: Getting Answers

What's our next portfolio pick? Our trade alerts let you know when the Fool makes a move. Read about our Fool PortTracker too.

Related Items

• Hall of Portfolios
• Rule Breaker Port
• Rule Maker Port
• Boring Port
• Drip Port
• Foolish Four Port
• Harry Jones


<THE CASH-KING PORTFOLIO>
A Look at Microsoft's Record
Can it continue this way?

by Rob Landley (landley@flash.net)

Austin, TX (Nov. 18, 1998) -- Microsoft (Nasdaq: MSFT) doesn't quite have the track record people seem to think. Until the early 1990s, Microsoft, Intel, and IBM were one big happy family under the umbrella of IBM's monopoly. Since then, Microsoft has been on a rampage, consuming adjacent industries and becoming the single most highly priced company in the United States in a little under a decade since first going public. The problem is, this growth is simply not sustainable.

Microsoft competes directly with its own customers. Pepsi tried that for a while by purchasing restaurant chains and making them Pepsi-only. All of the restaurants Pepsi didn't own immediately switched over to Coke, since buying Pepsi was funding the expansion of their competition. It was a classic dumb move, and Pepsi has now gotten the heck out of the restaurant business.

In Microsoft's case, competing with its customers has become part of its core business model, due to its internal lack of innovation. Lack of innovation was a good thing when backwards compatibility and standardization were the dominant forces driving the industry, but now it's a real handicap to Microsoft, forcing it to steal entire products from competitors in place of real innovation. Taking the web browser away from Netscape is only the most recent example. Before that Microsoft crushed dominant software like Lotus 1-2-3, WordPerfect, DesqView, QEMM, Stacker, Borland "Turbo" compilers, and dozens of others.

Today, Microsoft continues to fight on all fronts. The second largest pure software company is Oracle (Nasdaq: ORCL), and of course Microsoft is trying to muscle in on its territory with the Access database. It purposely broke compatibility for both RealAudio and QuickTime in exactly the same way, blaming both for "having bugs," which were revealed by changes that Microsoft made. (Memo to Microsoft: In the software industry, if your change broke it, it's your bug.) Microsoft has been called a "black widow spider" because it eats its mates. A partnership with Microsoft is corporate suicide unless you're just too small to interest them.

Microsoft insists that it wins on merit every time. Its argument that "nobody, anywhere, in any country can successfully compete with us because we're just so much better than the rest of the human race in anything we ever attempt" just isn't that convincing. It's darn hard for an application software company to compete with the company that writes the operating system. Imagine if Standard Oil had wanted to manufacture its own cars. Could Ford have survived?

These days, even venture capital is drying up for any new projects that might, conceivably, someday compete with Microsoft. The standard joke in the industry is that Windows 98 had nothing new because Apple hadn't done any innovating lately. But there wasn't a whole lot going on on the PC side either, despite the explosive growth of the Internet. The more Microsoft pushes its competition into the background, the more brittle its hold on power becomes. When nothing runs on Microsoft systems except Microsoft software, Microsoft will have become IBM.

As a result of its ravenous arrogance, Microsoft is starting to have public relations problems. There are thousands of true grassroots anti-Microsoft sites on the Web, and large corporations that have nothing to do with software are starting to plan for Microsoft's encroachment into their businesses (a great article in the NY Times -- registration is free). Gates himself regularly talks about expanding out of Microsoft's niche.

But Microsoft's expansions outside of its core software business have not been successful to date. MSNBC is no match for CNN. The Microsoft Network has been brushed aside by AOL and thousands of smaller Internet service providers. How is the Palm PC doing against the Palm Pilot? Read for yourself.

To combat the growing disdain for it in the industry, Microsoft tried to launch its own fake grassroots support campaign. Dubbed the "astroturf" campaign, it was exposed by The Los Angeles Times, and at first denied, then later defended by Microsoft.

Microsoft's legendary marketing department is spread very thin these days. Microsoft now has four separate public relations agencies working for it, which are producing anything but a unified front to the world. With a half-dozen seperate legal actions and investigations pending against it, corporate mistrust for Microsoft growing, and real grassroots anti-Microsoft groups springing up by the hundreds on the Internet, the company's PR department has its hands full.

Tomorrow, I'll talk about the industry's search for alternatives to Microsoft. The free market is capable of working around almost anything, and strangely enough, the word "free" comes up more than once in tomorrow's article. Until then,

- Oak

Order your copy of Rule Breakers, Rule Makers in advance.
The book arrives in January, and you can reserve your copy today!


11/18/98 Close
Stock  Change    Bid
AXP   +2 3/4   102.13
CHV   -  3/16  80.56
CSCO  +4 1/8   72.88
KO    +  3/4   70.94
GPS     ---    68.00
EK    +  13/16 76.06
XON   +  1/8   70.69
GM    -  1/4   72.88
INTC  +1 3/8   109.88
MSFT  -2 1/8   109.75
PFE   +1 7/8   111.38
SGP   +1 11/16 103.69
TROW  -  1/2   34.13

                 Day     Month   Year    History
        C-K      +0.98%   6.79%  18.70%  18.70%
        S&P:     +0.45%   4.17%  13.77%  13.77%
        NASDAQ:  +1.01%   7.12%  13.87%  13.87%

Cash-King Stocks

    Rec'd    #  Security     In At       Now    Change
    2/3/98   24 Microsoft     78.27    109.75    40.22%
    2/3/98   22 Pfizer        82.30    111.38    35.33%
    5/1/98   37 Gap Inc.      51.09     68.00    33.10%
   2/13/98   22 Intel         84.67    109.88    29.76%
   6/23/98   34 Cisco Syst    58.41     72.88    24.76%
   8/21/98   22 Schering-P    95.99    103.69     8.02%
   2/27/98   27 Coca-Cola     69.11     70.94     2.65%
    2/6/98   56 T. Rowe Pr    33.67     34.13     1.34%
   5/26/98   18 AmExpress    104.07    102.13    -1.87%

Foolish Four Stocks

    Rec'd    #  Security     In At     Value    Change
   3/12/98   20 Eastman Ko    63.15     76.06    20.45%
   3/12/98   20 Exxon         64.34     70.69     9.87%
   3/12/98   17 General Mo    72.41     72.88     0.65%
   3/12/98   15 Chevron       83.34     80.56    -3.34%

Cash-King Stocks

    Rec'd    #  Security     In At     Value    Change
    2/3/98   24 Microsoft   1878.45   2634.00   $755.55
    2/3/98   22 Pfizer      1810.58   2450.25   $639.67
    5/1/98   37 Gap Inc.    1890.33   2516.00   $625.67
   2/13/98   22 Intel       1862.83   2417.25   $554.42
   6/23/98   34 Cisco Syst  1985.95   2477.75   $491.80
   8/21/98   22 Schering-P   2111.7   2281.13   $169.43
   2/27/98   27 Coca-Cola   1865.89   1915.31    $49.42
    2/6/98   56 T. Rowe Pr  1885.70   1911.00    $25.30
   5/26/98   18 AmExpress   1873.20   1838.25   -$34.95

Foolish Four Stocks

    Rec'd    #  Security     In At     Value    Change
   3/12/98   20 Eastman Ko  1262.95   1521.25   $258.30
   3/12/98   20 Exxon       1286.70   1413.75   $127.05
   3/12/98   17 General Mo  1230.89   1238.88     $7.98
   3/12/98   15 Chevron     1250.14   1208.44   -$41.70

                              CASH    $120.62
                             TOTAL  $25943.87
 
*Please note: On 8/4/98 $2,000 cash was added to the
portfolio. $2,000 will be added every six months.

*The year for the S&P and Nasdaq is as of 02/03/98

</THE CASH-KING PORTFOLIO>

Are you a Foolish investor?
The Motley Fool Recommends...
Industry Snapshot
New format! A stock idea, industry overview, top players, and financials -- every two weeks! Get more info or order.

ValuTool 2.0
You give it the data, and it does the rest: PEG & Foolish 8 valuations, ratio valuations, and lots more. Get more info or order.

Foolish Eight Stock Screen
Here at Last! Foolish Eight Stock Screen. Get more info or order.
Other Fool Products...
Subscriptions
Primers
Reports
Investing Tools
Books
Fool Gear

Shop FoolMart!

 

  home  | news  | specials  | strategies  | personal finance  | school  | help  

© Copyright 1995-2000, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. The Motley Fool is a registered trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us