May 26, 2010


I need to catch up with my writing. I have been most busy over the past two or three weeks but I hope I am gonna have some more time in the coming weeks. Wait and see.

Today is a remarkable and quite meaningful day in the tech era. It signals the change in trends that many have predicted long ago. Apple has become larger than Microsoft.  By today's closing bell Microsoft's market cap was $219bn vs that of Apple's of $222bn

The chart below shows the evolution of both stocks and the Nasdaq over the last 10 years. Apple's stock has skyrocketed and the return over 10 years has been 1000%. On the other hand, if I had put my money on Microsoft, today I'd have less money in absolute terms (and let's leave the time value of money aside).

But what I find most shocking is how similar the Nasdaq's and Microsoft 's trendlines look. It's pretty much the same since 2004!! Microsoft has had a very profitable business over this period of time but, still, it has not been able to beat the index.

This situation confirms Apple's health: the iPhone, the iPod, the increasing clout of macbooks. Apple is a company that is in fashion and so many people love it. Microsoft, despite being very profitable yet, has lost its mojo and there are many doubts about some of its businesses (operating system/explorer, search/bing, mobile, etc.).

Simply put, if you were given the chance to work at Apple or at Microsoft, what would you do?

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