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Selling Blue Chip and Microsoft

Berko bashes bonds and broker advice to sell blue chips
Published: December 9, 2012

Dear Mr. Berko: My new broker, who is a sincere, caring, sweet young man, thinks the market could drop 20 to 25 percent.

Because I'm in my late 60s he advises, that to preserve my assets, I should sell all my stocks: IMB, Abbot Labs, Southern, 3M, American Electric Power, Clorox, Campbell, McDonalds, General Mills, Duke and Consolidated Edison that I inherited in 1985.

This amounts to $228,000, which he wants me to put into a government bond fund for income and principal safety. And if I sell now I won't pay higher capital gains taxes next year. He also wants me to sell 125 shares of Microsoft that I bought in 2003 at $28. I think that Windows 8, its Surface tablet and new smartphone could move Microsoft higher, and should I buy 125 more shares.

RP: Oklahoma City

Dear RP: “If it ain't broke don't fix it.” But tell that to a tire salesman, an auto mechanic, a stockbroker, government bureaucrats and a growing number of doctors. Sadly Microsoft's (MSFT-$27.45) Windows 8, is a textbook example of “fixin' what ain't broke!” I don't need a new browsing system, and I'm stone ginger certain tens of millions of others feel as I do.

A friend, also a dedicated Windows man, tells me 8 is so messy and complicated that it even paralyzes tech-savvy users and comments: “it's a messy smorgasbord of bewildering instructions and applications that drains your brain.” Jon Rettinger, of the Huffington Post, refers to 8 as “a confusing paradoxical riddle of an operating system.”

The guy who fixes my computer glitches recently purchased MSFT's Surface Tablet. He's chagrined because Surface runs on Windows RT and can't be upgraded. He was suckered into buying the clunky Surface for $600 when he should have bought the superior and flawless Apple for less.

He believes Surface will be a flop like MSFT's Kin Smartphone was several years ago. Now this software giant is building another phone to compete with Apple.

MSFT's hardware failures will hamper earnings; I doubt MSFT can trade comfortably above $30 in the next few years. And with PC sales beginning to fall this isn't the time to own MSFT.

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