Microsoft

Microsoft is trading less than 10 P/E multiples and it has net cash about 35 billion. The company has a 75% gross profit margin and grow around 10%. The Nokia deal should provide some positive earning boost in 2012. Microsoft never had any success in mobile and Nokia has about 40% of mobile market share. Even if Nokia's market share drop to 20%, that's still a big plus for Microsoft. Microsoft should trade around 32. I would buy it around 27.

Higher food inflation

One of the unintended consequences for printing money is higher food prices across the globe. It is especially tough on emerging market and poor countries. The uprising in Egypt and other parts of the Arab world is a warning for China and India. I suspect fighting inflation will be the priority for Chinese and Indian Government. The tightening of credits and interest rate will be more than market expected. It will finally break the uptrend for commodities this year (as long as Federal Reserve is not doing QE 3). The out-performance of Canadian and Aussie market will not be repeated this year.

Egypt situation

The market seems happy with the situation in Egypt. It assumes the end of Mubarak is near and it will be peaceful. The disruption will be insignificant. I do not agree with this assessment.
First, there will clashes between protesters and pro-government forces. There are many interested groups benefited from the current government and they will no go quietly.
Second, even a power change at the top is not going to cure the inflation, poverty and corruptions. Just look at Pakistan, the change of government did not do much good for its people.
Third, the oppositions are not well organized and the fighting for power will be ugly as soon as they lose their common enemy.

I will be very cautious right now. The market is due for a correction.