Wednesday, October 31, 2007

Jolted

I crunched into the last of the chips. The evening was fading and I was reclining into my chair in front of the television. It was time to open up my laptop and begin writing up the essays that I had been struggling with for a while now. And then I heard the roar. It sounded like somebody landed hard on the floor above me. I sat up startled. It was not the usual noise of someone running around or dropping something. No, it had an unearthly hollowness to it.

I looked up at the ceiling annoyed at the inconsiderate neighbor. It was 8:03 pm. Then it happened again. Bump! Bump! Now I knew it wasn’t the poor lady upstairs. I realized that the crisscross of fault lines over which I have lived with careless abandon for eight years has finally come to haunt me. My head was racing. Run for cover! I thought to myself. Do I have enough time to get out of the building? I guess not. The dinning table in the corner of the room looked like Fort Knox under these circumstances. I ducked under it. Bump! Bump! Rumble! Rumble! Wow this is taking for ever, I thought to myself.

Suddenly I remembered the wise words of an obscure news anchor suggesting that the door frame is one of the safest places during an earthquake. I got up from under the table and opened my front door. A gust of cold air hit me like a thousand needles. The night seemed chiller today. Never mind that, I stood firmly under the frame and looked around. I saw bewildered faces staring back at me from other aprtments. They all heard it. Ok so it was not just me. But for some reason that was no consolation.

I suddenly realized that the night had grown silent again. The knock from down under had stopped. Now it was just me in my pajamas standing at the front door in the darkness of the night. But I was not taking any chances. I grabbed my keys and rushed out. I was greeted by a large gathering of people standing around with a nervous smile on their faces. They all seemed to realize that the law of averages had caught up with us. We were due for a rattle sooner or later. This just happened to be as good a night as any.

After exchanging casual pleasantries we dispersed the impromptu gathering. I opened the door expecting things to be strewn around but everything seemed to be in its right place. The only sign of the event was the water that jumped out of the glass and spilt over the dinning table. I managed a grin. Apparently I was not the only one jolted out of my comfortable position.

Friday, October 26, 2007

Softie

It’s not a growth stock. There is nothing worth waiting for here. You might as well move on to greener pastures. The organization has lost its relevance in the market place. The days of it showing stellar growth are over. It’s a value stock now. All you can hope for is an increase in dividend and put it into your retirement fund.

Then it happened. The company with $32 billion in cash and $300 billion in market cap came back roaring. With 95% of the market share and a bottom line of $13Billion it was not expected to grow at a whopping 23% no matter what the conditions and yet Microsoft did the unthinkable. It turned around and became a growth stock once again.

It is not even twenty-four hours since they announced the results and there is a parade of analysts upgrading the stock and claiming that the growth days are back and yet nothing has changed in the company itself. It still holds the same PC market share. It still makes a loss in the online business, a wider loss for that matter. It still struggles to make a profit on the gaming business (though the Halo effect did help). And apparently Vista is not all that it is made out to be.

No this is not about weather MSFT has become a better company or not. I think that was recognized a few months back. The volume of the stock being traded over the last few months has been through the roof. The momentum is firmly on the buy side for the better part of the previous quarter. Everything about it was screaming a buy. It was and still is a growth stock. But then the media would have you believe otherwise even though this is the richest and the most dominant company in the world.

The psychology of the market is fantastic. It epitomizes the most fundamental characteristics of our species, GREED and FEAR. This is the place were you get extra points for stepping on people to get ahead. If you think about it, gambling in a casino is better than putting money in the stock market. At least there is nobody actively working to worsen your odds on the slot machine.

But then isn't that what makes the market the best place to invest. Fear and greed are both such overpowering emotions that very few have control over their actions in the midst of its outbreak. So wouldn’t it be the easiest place to make money if you could just get your head in order? And that is a big "IF".

Absolutely! And here’s to you softie.