May 16th, 2007
Which is the better investment, IBM or Microsoft?
Here is a fun fact to know and tell.
Let’s say that, with the corks popping at Y2K, you made a bet with your rich Uncle Jerry.
He would pick a stock, you would pick a stock. Whoever’s stock had done better when he passed on would control his fortune. He would give it to God. You would give it to yourself.
Well, if your Uncle passed on yesterday, the poor won.
Since January 2000, IBM stock is down 1.76% in value. But Microsoft’s stock is down 47.07%. (Check it out with the Google.)
Now, unfair you say. What about the dot-bomb? But if you look at the chart produced by comparing IBM and Microsoft shares, since January 2000, there is no point in time, from that moment to this, where a Microsoft investor would be ahead of his or her IBM counterpart.
Even if you started at the end of the dot-bomb, in October 2002, IBM has done better. Since October 11, 2002 Microsoft stock is up 41.6%, not bad. But IBM’s is up 85.39%.
Throughout this century, IBM has moved toward open source while Microsoft has tied itself to the proprietary model. Yet IBM has been the better investment.
I can’t tell you what I would do if Bill Gates turned to me today and said, “I’m tired. How would you like to be the Boss for a while?” I can’t say I could do more than bluster and threaten.
The hand is dealt. Microsoft can’t un-deal it. The bell can’t be un-rung.
The day of reckoning is at hand.
Dana Blankenhorn has been a business journalist for 30 years, a tech freelancer since 1983. You can follow Dana on Twitter. See his full profile and disclosure of his industry affiliations.
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| 05/18/07
