Even Microsoft Lagged For Over 5-Years

Over a decade ago, even Microsoft fell into a performance funk that lasted 5 years. It was a good lesson in how the biggest and best can fail you. I don’t remember whether I was an MSFT shareholder then or even what else I owned but the lesson is indelible. Nothing is good forever. Actually, what attracted me to Bill Gates, its headman, was his relatively simplistic annual report, particularly, clear, understandable tables of statistics. 

Today, I’m avoiding consumer durables like autos and find the home construction market shaky. But, there are always great pieces of paper that everyone avoids. General Electric is a good example. It got little attention but has soared off the page. Where are the 40-page reports on GE or even a mention?

Nobody’s perfect. Even Warren Buffett compiled several years of underperformance in recent decades. The numbers were considerable. For years stocks like Coca-Cola, IBM, Exxon Mobil and Walmart did not bring home the bacon. But, during the financial meltdown of 2009-’10, Buffett emerged as the investment banker to go to. Ask Bank of America and dozens of others who floundered on mortgage paper with shaky collateral. The country collapsed into recession in these years. BRK’s investment in a new preferred stock yielding 9% with conversion rights was a major win. I never added it up but it was easily over $10 billion. I bought the outstanding preferred stock, under $10,  much below par, $25, a steal in single digits.

Let's remember, the venerated Edwin Land, pretty much presided over Polaroid's demise to Canon and Nikon. For decades, Polaroid (Xerox too) were venerated stocks that rose dutifully a couple of percentage points, monthly, for decades. Then it was over, net, net of the whole thing. When Warren proclaims he’s investing for the next 100 years, don’t believe him. Nothing lasts in leadership for 100 years. Settle for 25 year, take your money and run, run, run. 

I’d rather buy stocks making new highs than own turnarounds. There is so much recovery material to choose from. Airlines are a great bet on economic recovery but it ain’t happening as yet. 

I discount consumer durables like autos and housing. Too many macros against them, starting with a possible recession, higher interest rates. Trump’s wrecking ball hasn’t spent its force as yet. 

Beware, too, of following the hot properties of the day. So far, Buffett’s major oil play, Occidental,  is a major disaster. We’re talking hundreds of billions invested here.  Range for the stock stretches down from over $60 to $40, past 12 months. Buffett needs to explain this play to me, I don’t get it. 

Yes, I know. Nobody is perfect. 

OXY made a double top just over $70 couple of years ago. 

Forget about owning huge slices of America,  like energy when macros outweigh management initiatives. Microsoft came back from a sleepy 5 years with initiatives in Artificial Intelligence. 

OXY ain’t coming back without good energy, namely rising prices for crude oil and refined products. Note,  General Electric in the first half of 2025 sprouted ahead nearly 100 points or 60%. This a plain aerospace play that we all shoulda owned. 

The central theme in my writing is the market’s innate power to destroy you.  It’s the Great Humbler. Sooner or later it will make you poorer, even foolish in what you own.

If your turnover surges close to 100% aren’t you working too hard making your brokers overly rich?  Believe me. Argentina won’t cry for you.