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Lessons Learned
November 2019
Microsoft
October 2019
Lessons Learned
Usually, the lessons that will help us most as investors are the hardest to learn and practice because most useful lessons pertaining to investments are counterintuitive. One is that “group decisions” are many times poor and late. Both individual securities and active investment strategies go through cycles where they outperform and underperform. It is difficult to step up and purchase a security after a period of underperformance, and it is easy to come up with many justifications to purchase a security after a period of outperformance. Buy high and sell low is the rule followed by most inexperienced, emotional investors, trend followers, and pure momentum investors. This is not a way to beat the market.
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Even as Microsoft and Apple vie for the title of the largest company by market capitalization in the S&P 500 Index, Microsoft has garnered little attention over the last few years. It did not even merit a letter in the FAANG (Facebook, Apple, Amazon, Netflix, Google) acronym. But Microsoft is arguably the one company that has brought about the greatest changes in society in the past fifty years. Its founder, Bill Gates, is possibly the most important entrepreneur since Henry Ford. Most businesses communicate using Outlook and Word, compile and analyze data using Excel, and develop and present ideas and goals using PowerPoint. Bill Gates’ story would seem to confirm that entrepreneurs are born, not made. He has an insatiable hunger for knowledge and advancement, and has set as a goal for his remaining years, the wholesale improvement of the human condition.
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