Thank you for your post. I shared many of your assumptions on Microsoft future and background until I started studying it in earnest. I was surprised by the outcome. GAAP net income over the last nine years (including the write-downs on bad ventures) and has used more than that amount on dividends and repurchases? Absent repurchases at exorbitant prices, this is not obvious bad capital allocation.
78B, and nearly doubled net income. Further, both Google and Microsoft have appeared to overpay for acquisitions, though Google’s have worked-out superior to Microsoft’s. 23B, which is humble relative to net income. 150B in net gain. One can add the deficits from Xbox, Bing, etc. to the R&D amount, however they are modest relative to how big is the business. Summing it all up, Microsoft’s management appeared to have the shame of riches, perhaps 1/5 of which they squandered, depending on what one estimations was required R&D sustain the core business versus bad business investment.
The current perception is Microsoft is much less well positioned as it was before, which is true, and that they have made many bad assets, which is true also. But the further belief that the business is a “value trap” or all its growth is “value destroying” is erroneous rather than supported by the historical numbers, for me. But I welcome others’ corrections to my thinking.
What is rigor mortise and is it possible to get rid of it? The rigor mortise is a stiffening of the limbs fundamentally. …