I like Jim

Cramer and I regularly watch his Mad Money television program. I also

occasionally listen to his much calmer radio show Real Money via a pod cast. In

general, I think he knows more about stocks then just about anyone and I have

made some money in the market following his advice over the past year or so.

However, he has take a recent stand that I’m not sure is correct.

He is down

on Microsoft, Dell and Intel on the assumption that the personal computer

market will continue to be sluggish for the next year or so. His take on Intel

may be correct because AMD has certainly achieved significant advances in

market share at the expense of the once untouchable giant. And Dell is getting

competition from discount Asian manufacturers, which forces their margins down

to painful levels, so he may be right to take a bearish stand there. However, I

am not sure about Microsoft.


stock price took a nose dive after announcing the delay in Vista and following

that up with a poorly performing quarter, but I wonder if that is just a lull

before a corporate buying spree? In a recent article in PC Magazine they should

a graph and report by Jon Peddie Research that showed

the percentage of PCs in active use that are fully Vista compatible. Their

conclusion was that only 51% of PCs in active use will be able to run Vista.

So we get

the usual question: Will corporations buy new machines to run Vista or will

they sit tight and stick with Windows XP? It is the same question we asked eight

months before Windows XP and Windows 2000 and Windows 95. It is the perpetual

question. Each time the answer has been yes they will buy new PCs — only it

won’t really happen in the form of a spree. Corporations spread capital

expenditures out over the two years or so following the release of a new

Windows operating system.


difference this time, and the thing that worries Microsoft and the Wall Street

brokers, is whether that cycle will repeat itself this time. Windows Vista is

going to have to have a compelling story I think. So far, I have seen some nice

visual enhancements and some nice features that make Vista a viable operating

system. I don’t think Vista will fall flat like Windows ME. However, from a

corporate purchase decision standpoint, I have yet to see what Vista brings to

the table beyond Windows XP that will make corporations buy it.

Perhaps I’m

missing something. Over the next year, TechRepublic will examine Vista sideways

and backwards to provide the membership with a comprehensive critique of Vista,

perhaps then I will see a reason to buy Vista. If reasons surface, I think

Microsoft will sell lots of Vista licenses, earn lots of money, and continue to

be the dominate player in software. If they don’t, it could mark a turning

point in the history of the personal computer.

What do you

think? Have you found a compelling reason to buy Vista? Are you buying

Microsoft stock or looking to dump it. Personally, I sold my Microsoft stock in

January 2006.