Friday Charts: Ballmer’s Biggest Blunders and the Next $1,000 Stock
Often imitated, but never duplicated, we’re serving up another round of our weekly charts.
Remember, the concept couldn’t be any more straightforward.
Since a picture can be worth 1,000 words, I try to zip my lips (well, mostly) and let some carefully selected graphics convey a few critical investing and economic insights.
This week’s gallery reveals the true reason why Steve Ballmer is bailing on Microsoft (MSFT), a dangerous psychological bias and a bullish economic phenomenon we haven’t witnessed in over five years.
Make Love, Not War
Iraq. Afghanistan. Now Syria?
With another potential armed conflict in the Middle East on the horizon, you’d think our world is becoming increasingly violent. And you’d be wrong.
Blame the perception of increased conflict on recency bias – putting too much weight into recent events. In reality, we’re not actually fighting each other as much as we used to.
Of course, as investors, we always need to be prepared for a new conflict. So what’s the best protection? A few choice investments in the oil and energy sector. (If you need help finding some, go here.)
MSFT: Still a Stupid Bet
After 13 years at the helm of Microsoft, CEO Steve Ballmer is out. He’s retiring at the end of the year. Want to know why? Take a look:
He completely missed out on the biggest technological shift in our generation – away from personal computers and toward smartphones.
It wasn’t purely bad luck, either. It was intentional.
As Ballmer famously predicted (incorrectly), “There’s no chance that the iPhone is going to get any significant market share. No chance.”
I’d certainly rank that as one of the worst predications ever made.
Of course, that wasn’t his only blunder:
- Remember the Zune? (If not, you proved my point perfectly.)
- Seen anyone with a Surface tablet lately? Yeah, me either.
- And let’s not forget the billions upon billions he squandered trying to make money on the internet via the company’s Online Services Division.
A little over a month ago, I pegged Microsoft as “a stupid bet, not a contrarian one.” Even with Ballmer’s imminent departure, I stand by that conclusion. Why? Because the damage he’s done to the company is not “just a flesh wound.”
A Rare, Global Economic Phenomenon
Here’s a budding trend that almost nobody’s talking about…
In the United States, Europe and China, flash PMI surveys – which gauge manufacturing activity – are simultaneously ticking higher.
As UBS AG’s (UBS) Andrew Cates notes, “A synchronized pick-up in global growth has been a rare phenomenon in recent years.” So rare, in fact, that it hasn’t happened since the financial crisis hit.
If this trend continues, it would be an undeniably bullish development. So keep an eye on it!
Place Your Bet on the Next $1,000 Stock
Priceline has gotten the closest so far. But it’s a one-trick pony. Google, on the other hand, could unlock growth from a myriad of new initiatives to propel its shares higher.
So which company will it be? Place your bet by leaving a comment on our website. While you’re at it, don’t be afraid to share what you think about this weekly column – or any of our recent work at Wall Street Daily.
Enjoy the long weekend!
Ahead of the tape,