[LINK] Oracle & Open Source

steve jenkin sjenkin at canb.auug.org.au
Sat Aug 5 16:36:45 AEST 2006


Danny Yee wrote on 4/8/06 1:21 PM:

> 
> So you should be able to make millions of dollars short selling Red
> Hat shares!  Why are you wasting your time posting here?


> (More interestingly, why doesn't Ellison short Red Hat if he really
> thinks it has no future?  He has the money to wear the risk.)

Good question - the answer is that the securities and derivatives
markets *don't* support this sort of (bet) investment.

A secondary problem is *timing*.  Like a car hitting a wall - it's
inevitable at some point, but predicting the instant is hard. To use
Futures or Options, you have to get the timing right...

[TROLL-free zone follows. Don't read or respond if you're rabidly pro-MSFT]

In 1999 I correctly predicted that MSFT stocks would drop by half -
sometime in the next 2 years.  I could not make an advantage of it
because I could not frame the prediction well enough to use the Options
system.

I posed this question publicly in an investment forum and got
dumb-founded looks ... Both for suggesting the capitalists favourite son
could trip or fumble, and there seemed no way to do it.

Current MSFT prediction:
 - negative income growth in FY 2007
 - commercial crisis in 2010/2011.

Why?
a) FY 2005 results were <10% income growth.
   Their rate of increase of profit has been negative for quite some
   time now...  It should take about 2 years to go below zero.

b) Once MSFT experience negative income growth, a lot of their financial
   followers will abandon ship.  They will execute a death spiral...

c) This is a classic product lifecycle - but MSFT is at the end of it...
   They've saturated the market and their products are being replaced
   (with appliances, not other PC O/S).

d) MSFT has *amazing* potential legal liabilities, EULA
   non-withstanding, for its poor O/S reliability and shallow security.
   If ACCC declared their O/S's fail under the TPA (not merchantable
   quality), they're gone - very fast.
   [The benchmark is *free* O/S's.  If you can't do as well,]
   [you should be adopting them as your base.]

It's highly unlikely for (d) to occur.

And MSFT O/S *will* be around for a long time - they have a niche, but
it's more like 12-20% of the market, not 95%.

Robert X. Cringely has a whole 'pulpit' article on the very poor
management at MSF and that they should clean it out or go under:
<http://www.pbs.org/cringely/pulpit/pulpit20060615.html>

The next article, Cringley says it's too early to predict the demise of
Microsoft (end of article).
<http://www.pbs.org/cringely/pulpit/pulpit20060629.html>

Quote:
> Right now Microsoft is like a deer in the headlights. 
> They are stuck on software and computer stuff. They can't move.
> There are much more interesting growth opportunities out there.

hope this is useful...
sj


> Danny.
>   ---------------------------------------------------------
>   http://dannyreviews.com/ - over nine hundred book reviews
>   http://danny.oz.au/ - civil liberties, travel tales, blog
>   ---------------------------------------------------------


-- 
Steve Jenkin, Info Tech, Systems and Design Specialist.
0412 786 915 (+61 412 786 915)
PO Box 48, Kippax ACT 2615, AUSTRALIA

sjenkin at canb.auug.org.au http://www.canb.auug.org.au/~sjenkin



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