Mike,

>> I wouuld invest money in MS after a .NET failure if I believe it was a
>> good investment. There is also a good chance that the market would panick
>> and drive the stock price to a value well below its "true" value. The
>> stock price will eventually climb to its true value and the opporunists
>> who bought low will make a decent profit. It wouldn't be anything I
>> haven't seen before.
>>
> I don't think companies that invest millions of dollars in enterprise
> computing equipment care about how the company is performing in the stock
> market (aka the expensive baseball card market).
>
> Thats what it takes to rebuild a company. Not "good chances" in a 100%
> unpredictable stock exchange.

You are confusing concepts here. Purchasing a good or service from a company is not the same as investing in a company.

Investors purchases stock in a company to make money. The expected return is balanced against the risks inherent to the stock and decisions are made based primarily on these two favors.

FYI. There is strong empirical evidence that the market displays efficiency with respect to weak tests nad thus, most investors would not consider the past performance of a stock when evaluating its value.

I invested in perceived "failed" companies more than two dozen times already and I have come up way ahead. I didn't win every single time but I did win a sufficient number of times to make it worth my while. Now

It is my belief that the market does not display efficiency with respect to some semi-strong tests. I believe the market is in a state of panick when some quantitative indicators reach a certain threshold. My investment strategy takes advantages of those anomalies to make excessive profits.

FYI. The stock exchange market is NOT 100% unpredictable. There is a HUGE amount of litterature discussing Portfolio Theory and Investment Analysis and I would venture that many theories are not even published because their creators don't want to share their winning secrets.

Companies purchases goods and services from another company based on several selection criteria - usefulness of product, price, quality of services, vendor reputation, etc. If Microsoft develops new products after a .NET failure, some companies will buy it based on their own selection criteria.

I don't understand where you were going with your reference to the baseball card market. But while we are on the subject on collectibles, you may be suprised to hear that many pension funds include collectibles (art, baseball cards, etc.) as part of their portfolio.

Daniel