I came across the chart below on the weekend.
Source – Why Microsoft Beats Apple
Unfortunately, it was accompanied by the following quote –
Microsoft could be the better value. Not only is it cheaper than Apple relative to its earnings per share, but Microsoft’s business also has greater strengths, and better prospects, than the market appreciates.
Granted, when these two have gone head-to-head in the past, Microsoft has come off worse—in tablet computers, music players and smartphone software. Apple desktops and laptops also have gained market share in the past decade, albeit from a small base.
As you can see it is the usual collection of fluffy statements regarding value and other such bollocks. But, the article did serve a purpose in that it got me thinking about industries where you have two dominant players who are rivals in everything from their approach to business, the products they make even down to the personality of their CEO’s.
The first chart prompted me to look a little wider at the relative long term performance of the two.
As you can see if you had bought both companies in the early 1980’s and God forbid simply held them then you would be much better off with MSFT. Even with the fact that MSFT has gone nowhere for 14 years and AAPL has been the markets darling.
However, there is something much more interesting in the price trajectory of both companies that I might look at in more depth later on…….