The Microsoft Earnings Trade That Has Worked 11 Times in a Row

Christian DeHaemer

Posted January 30, 2024

Here at Pro Trader Today we have about fifty-five years of market experience which is why we can give you profitable information that you won’t find anywhere else.  And one of them is Christian DeHaemer’s secret Microsoft Earnings Hack.

I know MSFT.  I first bought the stock in 1999 and promptly lost half my money to the dotcom crash. However, it remained on my screen and after 13 years of watching it go sideways, I made a huge bet with a third of my portfolio at $29.50 a share.

When you believe in something you go all in.  I had done my research, believed in the cloud and the then new software as a service(SAAS), and the chart looked like one of the greatest coiled spring chart patterns in history…

And it had just broke out.

At the time MSFT was cheap and no one wanted it.  A decade of dead money sucked all the life out of it. It was now a value stock with a dividend of 4%, a p/e of 10 and somewhere around 20% earnings growth.  Today, the dividend is 0.78% and the p/e is 40 with a 27% earnings growth.  

It’s not the same investment.  Given its $3 trillion market cap, it seems unlikely that MSFT will go up another 1,200% this decade.

That said, if you invested in MSFT on January 31, 2013 you would now have $176,392.32 – a 29.84% annual return which is right up there in John Templeton territory.

The impetus for this buy was Warren Buffet, who after taking huge losses in the early 1970s and with BRK-A just above $2, Berkshire invested $4 million in GEICO.  He liked it so much he kept buying until he took the company private in 1996.  

I can’t find the current value of GEICO but people often say it is the stock that made Warren the richest man on earth.  In 2023 GEICO made Berkshire Hathaway $39 billion in revenue. 

A $10,000 investment in Berkshire (BRK-A) in 1980 (as far back as I can find) would have made you $20,079,310.34 a 18.92% annual return.  You’d take that anyday of the week and twice on Sunday.

Microsoft Earnings

Five of the Magnificent Seven—Alphabet, Amazon.com, Apple, Meta Platforms and Microsoft all report this week and the Fed is meeting tomorrow, so it’s a big week.  

Microsoft reports earnings after hours today.

Here is the secret hack I’ve been telling you about.  In the last ten out of eleven times MSFT reported earnings, the share price has risen into the announcement and sold off for about two weeks afterwards.  

Only after the last earnings announcement did the share price keep going up due to AI/ChartGPT hype.

Here is the three year chart:

A betting man might buy some call options about a month before earnings day which expire just after they are announced.  However, be sure to exit your calls the day of earnings before they are announced which always happens after the market closes.

Just don’t tell anyone, we don’t want any Wall Street fat cats messing up the trade.  

All the best,

Christian DeHaemer
Pro Trader Today