Ballmer says goodbye, so I say hello

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Here’s the Microsoft trade to make on the news that Steve Ballmer is retiring.

When I heard the news that Microsoft’s chief executive, Steve Ballmer is going to retire in the next year, I literally spit my coffee on my lap. I once told Richard Edelman, from Edelman Worldwide, on my TV show and at his house over beers that I would buy Microsoft the day Steve Ballmer announced he was leaving. Richard, whose firm (and he in particular) does the public relations for Microsoft, Walmart and a bunch of other companies like that, is a good friend of mine and I used the old argument that Ballmer always seems to skate to where the puck is rather than where its headed.

I am indeed thrilled for long-suffering Microsoft MSFT -2.06% shareholders that they are getting rid of the CEO under whose watch the stock has gone absolutely nowhere except as a good occasional trading vehicle.

: BigCharts.com

Remember what happened to Yahoo! YHOO -0.11% since they’ve gotten a good CEO installed a couple years ago?

: BigCharts.com

I wouldn’t be surprised to see Microsoft’s chart look similar over the next couple years.

I’m going to buy some Microsoft call options dated out into December and later with strike prices from $37 to $40. Using out of the money options gives me upside leverage with little capital because the premium on those options is quite low. Clearly though, I could lose the entire capital put into this thing.

You say “Yes”, I say “No”.
You say “Stop” and I say “Go, go, go”.
Oh no.
You say “Goodbye” and I say “Hello, hello, hello” – The Beatles-Hello, Goodbye

Cody Willard writes Revolution Investing for MarketWatch and posts the trades from his personal account at TradingWithCody.com, which is not affiliated with MarketWatch. At time of publication, Cody was net long Microsoft. Follow Cody on Twitter at twitter.com/codywillard.

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Cody Willard

Founder, CEO & Chairman at Wall Street All-Stars, LLC

Cody Willard is the founder of Wall Street All-Stars and the principal of CL Willard Capital. Cody serves as an adjunct professor at Seton Hall University and writes TradingWithCody.com. He was an anchor on the Fox Business Network, where he was the co-host of the long-time #1-rated show on the network, Fox Business Happy Hour. He wrote a monthly investment column for The Financial Times as well as columns for TheStreet.com and was a regular guest on CNBC’s Kudlow & Company from 2004 to 2006. Cody’s stock picking ideas and economic outlooks have been featured on NBC’s The Tonight Show with Jay Leno, ABC’s 20/20, CBS Evening News, CNBC’s SquawkBox, Jon Stewart’s The Daily Show, as well as in the Financial Times, Wall Street Journal, New York Times, and many other outlets.