Microsoft: Why Did I Sell, and Now?

In November 2004, I bought 200 shares of Microsoft. The purchase was to add some tech stocks to my investments as I had only one tech stock, Taiwan Semiconductor (TSM), and none of my mutual funds were heavy in technology companies. Though Microsoft was no longer a high-fly stock as it used to be at that time, it’s still a solid company with dominant position in PC software. Plus, it pays dividend. The purchase price was $29.82 a share.

In the past three years, however, the stock went absolutely nowhere. When Microsoft announced stock buyback plan last year, I decided to keep the shares with me because I was hoping that the release of the long anticipated Windows Vista operating system could restore its glory, and boost its share price. That didn’t happen. Instead, the stock was hit by production delays, and earnings disappointment. And every time the stock made a recovery, it dropped again almost immediately.

After seeing this stock went through the seemingly endless one-step forward, one-step backward cycle, my patience finally ran out and cut it loose at $30.23 early this month, though I have heard that the release of Halo 3 was the most successfully entertainment event ever. On Friday, the stock finally broke the cycle and every MSFT holder is jubilated by the 10% gain after the company released the better-than-expected third quarter earnings report, which was indeed helped by Vista and Halo.

For the past three years, I made a total of $846 from MSFT, mostly on dividends including the $3 special dividend it distributed at the end of 2004. That’s equivalent to an annual return of less then 5%. I probably could do better if I put the money in a savings account.

And what did I do with the proceeds? I bought some ValueClick (VCLK) shares, and immediately lost all the money I made from MSFT.

Comments

[Tom B:]

Don't feel so bad; MSFT may well have only a few good quarters in it, anyway. Best to get it off your hands.

2007 Oct 29 09:47 AM