I am an economist and Microsoft are a business with numerous volatile investments, such as Nokia and Skype. With Nokia struggling and Skype becoming less and less competitive you will soon see a drop in the value of Microsoft shares. This is because the liabilities which Nokia hold equate to $4.6bn also their net operating loss is nearly $1bn. Microsoft purchased Nokia because if Nokia were to fail then so would the Windows Mobile Platform. Also with a number of competitors Skype is facing increased competition from cheaper alternatives. This will result in lower gross margin as Skype will have to compete. However this is in stark contrast to Sony who have recently purchased a number of silicone chip manufacturers as they look to take on Samsung. They have low liabilities compared to Microsoft but with significantly less cash reserves. I have been advising my clients to avoid Microsoft because their price is near peak and will have to return to market equilibrium soon whereas Sony are below equilibrium with a market capitalization of $20bn. Also with their cloud streaming Gaikai recently being revalued at $1.4bn and their profits increasing and strong PS4 preorders. There will likely be a share rise and dividend from Sony.
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