Phat_Goat, discarding microsoft due to xbox's [questionable] flop (isn't it completely sold out until feburary in the US?) isn't smart.
The best way is to compare statistics.
Microsoft has a lower P/E (price elastisticy) ratio than apple. This means Microsoft's prices are more stable. Apple may have higher jumps, but it also has higher falls. From this perspective, Apple is a greater risk. Of course, this makes sense as microsoft has market dominance. Then again, risk = reward.
Microsoft is roughly three times more profitable (profit margin and operating margin, not revenue).
Apple has had a better year in stock growth, especially after an outstanding increase in quartely profit.
On the other hand, it was downgraded twice in december by two different stock research firms. This is signifigant. In fact, the general recommendation is better for MS than apple. This is partly because MS's stocks are relatively low while it has been a historically well preforming company. It is the blue chip of software, if you will.
Analysists:
http://finance.yahoo.com/q/ao?s=AAPL
http://finance.yahoo.com/q/ao?s=MSFT
Microsoft is cheaper right now. Looking at stock price charts, Apple has had more consistent growth over the last 3ish years. However, it could be inflated and sharply drop. On the other hand, MS is on the verge of a new OS (and with it, I presume, and updated office). As software remains a primary money maker, this should be reflected well in stocks.
You should diversify and purchase in both. Both will go up long term and you are better protected against firm flux, although not really against industry flux.
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Last edited by Phil, January 1st, 2006 12:31 PM (Edited 1 times)