Microsoft's Nadella: Is the Safe Choice the Right Choice?

Microsoft is said to be close to naming insider Satya Nadella as its next CEO.

Jan 31, 2014 at 10:15AM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

U.S. stocks look set to cap a volatile week (relative to what investors have grown accustomed to) with another day of losses, with the S&P 500 and the narrower Dow Jones Industrial Average (DJINDICES:^DJI) down 0.84% and 1.1%, respectively, at 10:15 a.m. EST. Technology giants Google and are experiencing different fortunes today on the back of their Thursday afternoon earnings releases, respectively up 3.7% and down 7.2%. However, I'd like to focus on another technology stalwart in the headlines this morning, Dow component Microsoft (NASDAQ:MSFT).


Microsoft's Satya Nadella. Source: Microsoft.

It's being reported that Microsoft is close to selecting company insider Satya Nadella to succeed Steve Ballmer as CEO. This would end the uncertainty surrounding the five-month search for Microsoft's next chief, but it may not entirely quell investors' frustration, particularly for those who were looking for a sign of a clean break with the "founders' era."

Ford CEO Alan Mulally, who was thought to be the top external candidate for the job, dropped out of the race earlier this month. According to The Wall Street Journal, Mulally was frustrated with the search process and concerned about serving under/on a board that includes the only other two CEOs the company has ever had (Ballmer and co-founder Bill Gates). Other candidates for Microsoft's top spot have reportedly raised the same concern with the tech giant's directors.

That appears to have had some effect on Microsoft's board, as the nomination of the new CEO may be accompanied by other changes. Bloomberg reported that directors are considering having Microsoft lead independent director John Thompson take Gates' position as board chairman.

I (along with, I suspect, many Microsoft investors) would prefer to see an outsider take over the company at a time when it faces a terrain shift in the technology industry away from PCs toward mobile devices. Still, Nadella, who heads the cloud and enterprise division (formerly named the server division), is arguably the best internal candidate for the job. But "cleaning house" on the board is, in my opinion, the only way this insider will be able to think like an outsider and act freely to alter the course of this supertanker. Anything less and the task of choosing a new CEO will be half-complete.

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Alex Dumortier, CFA has no position in any stocks mentioned; you can follow him on Twitter @longrunreturns. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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