This dead money is reviving

For those who know me, it's no secret that I love Microsoft (MSFT) and I have started to accumulate its shares since prior to the financial crisis in 2008. Over these years,  I have regularly talked about MSFT (for example, here, here, and here), including early this year that I was pudding the table urging to buy MSFT. But I know my talking about MSFT usually goes into the dead ear as no one is interested in the dead money like MSFT. Most people are only interested in sexy high profiled stocks like AMZN, TSLA etc. But for me, long-term investing in the dead money like MSFT is one of the most unknown or misunderstood secrets of wealth building techniques, which can truly allow you to amass an enormous amount of money but with very little risks involved. Basically you can sleep soundly with money in stocks like MSFT as it is almost like saving your money in the bank but you can enjoy high-growth of dividends which can be compounded via DRIP. But today, I must say the dead money hat for MSFT should be tossed off. Under the leadership of the new CEO Nadella, MSFT has successfully transitioned from a PC business-focused company to the front lines of the mobile revolution. It now has 2 new smartphone models,the 950 and the 950X, and both run on the company’s new main operating system, Windows 10. More impressively, both phones carry advanced technology called Continuum, which will allow the phone to be easily connected to a PC monitor that essentially turns the phone to a PC. In addition, MSFT also rolls out a new laptop computer, the Surface Book on Windows 10. Therefore, Microsoft now offers smartphones, laptops and tablets that all run off Windows 10. This has virtually established its own  “ecosystem,” a core business moat for Apple's success. Moreover, MSFT's cloud business is also thriving and starts to add significantly to its bottom line. All in all, MSFT has been beautifully transformed, which is translated into a great earnings report that has surprised everyone. MSFT jumped 10% after the ER, reaching multiyear high close to $55. I'm sure it will very soon challenge its all time high around $58 reached at the dot.com bubble time 15 years ago.  Not long ago, I was thinking MSFT may soon become next Apple. This seems more and more a reality.

You may think I must be happy with a fast advancing of the stock prices for MSFT. Not really. As I said, I love MSFT for its stable multi-streams of income that allows it to pay increasing dividends over long period of time. I actually wish it could stay low that will allow me to accumulate as many shares as possible. This will eventually make me much richer than what its share price gain will bring. Looking at its increasing share prices will certainly make one happy at the moment, it actually hurts in the long run. But of course, I cannot stop MSFT from becoming a high growth stock again.

So is it a good time to buy MSFT now? Not really. While MSFT is still having a very good valuation even near the historical high due to its high stockpile of cash, very near term it is quite overbought after a 10% jump. I think MSFT may likely come down to test its support around $48, about 5-10% correction. When that happens, it will be a great buy to me for long-term.