Microsoft

(MSFT) - Get Report

and cockroaches. No matter what happens in these uncertain times, you can count on both to survive.

Which is why you should be stocking up on Raid and shares of Microsoft.

I'm not going to argue here that the new version of its ubiquitous operating system, called Windows XP, will save the world and the computer industry from the current spending slump. Truth is, I don't know, and neither does anyone else.

Consumers will either buy more PCs after the attacks of Sept. 11, or they won't. They'll buy a new PC to run Windows XP or to stay connected at home in lieu of traveling, or they won't buy a new PC in order to hoard cash. We just don't know.

Oh, and the Xbox? Sorry, but one thing I learned from the Internet bubble was

not

to invest in a business based on the premise that the more product it sells, the more money it loses. For every Xbox video-game console Microsoft hawks after its launch this November, it will lose more than a hundred bucks. By the end of the year, it says it wants to have 1 million to 1.5 million units available. You can do the math easily enough.

Motorola
Tish Williams
and Tero Kuittinen Vivendi
George Mannes and
Glenn Curtis TJX Companies
Tim Arango and
Odette Galli Genentech
Adam Feuerstein
and Lissa Morgenthaler Boeing
Gary B. Smith
and Glenn Curtis

Whether Microsoft makes that money back later by selling the software that goes along with the console -- video games to you and me -- also remains to be seen. Again, we just don't know, and that's not a reason to buy the stock.

Cold, Hard Cash

What we

do

know is that Microsoft has more of what is most important in the capitalist game than anything else: cold hard cash, and the ability to spend it.

With more than $30 billion in cash, Microsoft has one of the best balance sheets of any company in the world. With that much cash, Microsoft can afford to fund its businesses through good times and bad, and defend itself no matter what a changed world throws at it, or us. Go figure: the monopolist has somehow managed to amass the biggest pile of money.

It doesn't matter whether the attacks come from the U.S. legal system, some cagey competitor or even radical extremists. Microsoft has the biggest wad on the block, and that's why it will survive and thrive.

Consider just last week, when the company said it would invest an additional $30 million in its MSN Internet portal. While many start-ups and established firms scrounge these days to get just a fraction of that from investors or their own boards, Microsoft can afford to put that much money behind MSN and not even miss it. After all, $30 million isn't even a drop inside a drop in its cash bucket.

At one-tenth of 1% of its available cash, Microsoft's investment in its MSN portal amounts to a rounding error. Any time you've got $30 million to throw around and have it amount to a rounding error of your remaining resources, you know you've got a lot to work with.

What's more, unlike a mega-global corporate giant like

General Electric

(GE) - Get Report

-- which is no slouch itself when it comes to healthy balance sheets -- Microsoft's most valuable assets can't be destroyed. It doesn't have big engine-building factories or appliance-producing plants to attack. In fact, it would be easier for the U.S. and the world to eradicate terrorism -- or cockroaches, for that matter -- from the face of this planet than it would be to get rid of the Windows operating system and the billions in revenue it generates.

Fact is, Microsoft deals in intellectual property, in ideas. Even with illegal software pirates siphoning off perhaps billions more of the company's potential sales each year, Microsoft is still making a ton off those ideas, ideas that haven't really changed in the last 25 years. That's because again, like cockroaches, ideas are hard to kill. And once they get a toehold somewhere, they tend to multiple and thrive.

Not that folks won't try to put the kill on Bill and his idea-brimming boys. The Justice Department, rightfully goaded by Microsoft's enemies, might be able to mortally wound the giant if it can convince a U.S. court to require that Microsoft open up the source code for Windows to its competitors. That, in my mind, is the only realistic way to break the company's monopoly in operating systems; it would be a worse fate than breaking up the company itself.

But from following the case over the past three years, I don't think Microsoft will let that happen. It has played the legal game extremely well, and will likely press for the most it can get up to the very end. If faced with the possibility of losing the keys to its code, though, I think the company would settle.

Now, at 27 times 2002 earnings, Microsoft's not cheap, especially when you consider earnings are expected to grow only 4% in the coming year. That means the shares could face pressure, especially if Windows XP and Xbox don't generate the amount of sales investors would like, a scenario that has a good chance given the sudden fear that consumers have about spending money.

So don't think that just because shares are down 30% from their 52-week high, they can't drop lower. They can, and probably will. That, too, is an unknown.

But there is one thing I am sure of, although I know it doesn't take a heck of a lot of courage to say it, and that is that this thing ain't going to zero. Not if Bill and his $30 billion bundle have anything to do with it.

In times like these, that's one of the better investment arguments around.