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Microsoft vs. AOL: Should I purchase One Or both..? Please don't get too technical with your response.


After reading your post, I have two major problems with your request for information:

First, I don't think it is very wise to base an investment decision on what some person says on an internet message board. I guess the real irony of the situation is that you chose to make this post on the Motley Fool site, which makes a great effort to teach people how to research and select stocks so that they won't have to resort to such methods. If you don't believe me, just take a look at this quote from the disclamer:

Treat the contributors here the same way you'd treat anyone you'd met for the first time at a party. This is important because anyone can show up to our party: no invitations are required. You shouldn't make an investment just because some stranger (or even a friend) talks it up; you shouldn't treat cyberspace any differently.

The fundamental concept is that you should NOT rely upon the information or opinions you read. Rather, you should use what you read here as starting points for doing independent research on companies and investing techniques. Then judge for yourself the merits of the material that has been shared in our forum.

For all you know, I could be Satan himself, and the purpose of my recommendation would be to try and ruin your investment portfolio. Besides, if someone were to say buy AOL and it tanks, would they then offer you a refund? That's highly doubtful. Therefore, any investment decision you make should only be made after you have completed your research and determined that you are comfortable with the selected stock(s). After all, YOU are the one that is going to have to sink or swim with the results.

Second, you request that we don't get "too technical with our response". If I am basing my purchasing decision on someone else's recommendation, I would probably want them to be as thorough and technical as possible. I would want to make sure that I understood the business models of each company, their underlying fundamentals, how they rate against their competition, what there future prospects are, etc. When you start doing these types of evaluations, it inherently becomes "technical", especially when you deal with high-tech companies. If you try and keep it watered down, then you run the risk of the saying something as worthless as the following:

"AOL is good because it has to do with internet, and everyone needs that. Microsoft isn't as good because the DOJ is going to break them up, and Bill Gates isn't doing a good job of running the company."

Would you want to base an investment of hundreds or thousands of dollars on those statements? I sure as heck wouldn't.

That being said, something tells me that you still need to do quite a bit of research on each of these companies before making a final decision. Since each of these stocks are owned by one of the real-money portfolios here at the Fool, a good place to start might be the BUY recommendations that were written by the portfolio managers. These reports are available from the following links:

They will give you a sense of the reasoning they used to determine why MSFT or AOL matched their investing criteria. That isn't to say that one or both of them will match your individual criteria, so don't feel obligated to buy those stocks just because the one of the Fool portfolio managers did. Once you get through those links, feel free to look through their quarterly and annual reports to get a feel for their business, their competitors, and the direction they are heading. After compiling those types of information, you should be well on your way to identifying FOR YOURSELF which investment path makes the most sense given your situation.

Just my two cents.

the LanceMan

DISCLAIMER: I have no position in either AOL or MSFT at the present.
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