Yesterday after the close Microsoft Stock surprised investors and analysts alike with both their revenue and earnings. Stunning to say the least, the stock shot up in after hours trading to over $36.00 for a gain of over 6%. Lots of investors and in particular analysts have written off Microsoft Stock and Intel Stock among other tech stocks as being in a declining industry of PC sales. They also have repeatedly attacked Microsoft as too big and not much of an innovator. Many analysts feel the days of Microsoft as a leading software company are slowing. I have written many articles on Microsoft stock over the past 4 years and all of them point to the same thing. Microsoft is not an innovator and never was. Instead they tend to tinker with their products and have “retooled” themselves a number of times. They advantage they have is their enormous control over the entire software industry which particularly for businesses is dominant to say the least. In the home products market Windows 8 with all the bas press actually continues to make inroads. Despite all the MAC talk and Apple Products we see in movies, Windows products runs the computer industry and have a strangle hold on the business industry. Add in Cloud computing, office products, gaming industry, and now windows phones and the emerging windows tablet products and, well you get the idea. This is why I have traded within Microsoft stock for more than 14 years. They meet every aspect of my investing criteria – they are:
Microsoft Stock Put Selling Portfolio criteria
- a dominant player with only distant competitors
- the leader of their industry that everyone has to try to beat
- wide and growing multitude of products many of which dominant their respective markets
- incredibly wide moat of cash both in the US and outside the country
- strong product name brand recognized in every part of the planet
- ever increasing dividend
- double-digit sales growth is not uncommon
- beautiful trading pattern for my style of investing
- pullbacks in the stock are not only welcomed but opportunities for additional profits
- any time I have been assigned shares over the past 14 years the trades have always ended with excellent profits
- enormous level of confidence and comfort when selling puts, selling calls (naked or covered)
- No need for doing any kind of spreads, iron condors, butterflies etc., which require higher commissions and more adjustments than simpler options strategies
You can see that in my book Microsoft continues to be a prime stock. I have never had a year in which I was not trading options in Microsoft Stock. I have written many articles on investing in Microsoft stock but probably the article that has resulted in the most views and definitely the most emails was my article on Microsoft Stock – Better Than Gold. In that article I explained the enormous earnings I had made to April 2011 at a time when the price of gold was sitting at all-time highs. My earnings dwarfed those of anyone who had bought gold at the lows and sold at the highs.
Microsoft Stock and Using Hide and Seek Covered Calls Strategy
Recently I received a number of emails from investors with long-time holdings in Microsoft stock who have used the Hide And Seek Covered Calls strategy to boost the dividend to double-digit annual returns without losing their stock. The jump overnight and the present earnings outlook have many wondering should they be considering covered calls at this stage and for other investors, how to rescue covered calls now caught in the money with the jump in Microsoft stock.
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