Archive for April, 2014
Beta versus VHS.
Apple versus IBM PC.
Android versus iPhone.
In the tech sector and in consumer circles alike, there’s nothing like a “standards” war to get folks talking. In fact, I’m betting that you’ve been involved in one or two of these friendly fracases yourself.
While these debates have all sorts of catalysts, they invariably come down to one question …
Who’s going to win?
It’s a totally understandable query.
I mean, consumers want to predict the winner so that they don’t waste a big piece of their household budget buying accessories or getting upgrades on a product that’s headed for the digital “glue factory.”
And investors? Well, we want to project the winner so we can bet on the eventual champion – and avoid the red ink that follows when the contestant you’ve chosen ends up on the mat.
But I’m going to let you in on a little secret: Standards-war investing isn’t always just an “either/or” choice – a 50/50 bet that can leave you as a big loser.
Indeed, in most standards wars, there’s usually a way to profit no matter which contender wins.
It’s about as close to a “sure thing” as you’ll find in tech investing.
Today, I’m going to tell you all about the latest standards war.
And I’m going to show you a company that’s playing both sides – and that you can bet on to win.
I’d like to introduce you to Cortana.
And let me tell you: She’s awesome.
Cortana can search the Internet, set up reminders, shift calendar appointments, manage your mishmash of meetings, find restaurants, send text messages, and place phone calls. And, as good as she is right now, Cortana only seems to get better the more that I deal with her. The longer we work together, the more she seems to understand my habits and anticipate my needs.
She never complains.
And she never takes the day off.
In short, I can only say that Cortana is the best personal assistant I’ve ever had.
Personal digital assistant, that is …
Based on a 26th-century artificial intelligence (AI) character in the smash hit Halo videogame series, Cortana made her grand entrance as part of Windows Phone 8.1 – the key new update for Microsoft’s mobile operating system (OS).
After more than two years in development, she arrives at a crucial juncture for Microsoft. In fact, one analyst recently wrote that “Microsoft’s bold new mobile efforts rest on [Cortana’s] virtual shoulders.”
Truth be told, Microsoft is secretly hoping that the prim and efficient Cortana manifests her latent “dark side.”
You see, the folks in Redmond really want Cortana to become a “Siri Killer.”
But we just want her to point us to the next “killer app” – because we can cash in.
Indeed, we will cash in.
And Cortana and I will now show you how …
When Chuck Post became a leasing agent out here in the Bay Area back in 2009, the post-financial-crisis rental market was so bad that he often resorted to “discounts,” inducements like free parking, and even the first month free – just to get prospective tenants to sign on the dotted line.
That was then.
And this is now.
Thanks to a booming economic recovery, a record-breaking rebound in stocks and the emergence of entirely new sectors in tech, Bay Area landlords are now calling the shots. Prospective tenants are lining up when a new listing appears, apartments get snapped up in a week or less, and rents are skyrocketing, Jed Kolko, chief economist for housing-services player Trulia, told The San Francisco Chronicle.
“Rents are rising faster in San Francisco than almost anywhere else in the country,” Kolko said. “Rising rents are a bigger challenge than rising home prices, especially in a place like San Francisco where buying is out of reach for many middle-class and lower-middle-class people.”
This isn’t just a lot of jawboning.
In San Francisco in the third quarter, the average monthly asking rent in the bigger complexes punched up through the $3,000 barrier for the first time ever – hitting a record $3,096, says researcher RealFacts.com. That represents a year-over-year bump of 11.9%. And median asking rents for San Francisco rentals listed by apartment-leasing-service Lovely rocketed a massive 21% to hit a record $3,398 for that same time period, The Chronicle says.
And don’t expect a reprieve: San Francisco experienced the single-biggest rent increase in America in January, a 12.3% surge that jumped the monthly rent of a two-bedroom flat to $3,350 a month. Nationwide, rents increased an average of 3% – an increase that was nearly double the U.S. inflation rate of 1.7%.
Though analysts I speak with tell me that Silicon Valley rents won’t keep zooming at the current pace, the ongoing tech boom that I am forecasting essentially ensures that the rental-housing boom will continue until the decade’s end.
In short, this “rent inflation” is a very big deal.
In the Bay area, soaring rents are creating what one official referred to as a “crisis of affordability” that could short-circuit the tech boom.
And in the broader U.S. economy, zooming rent costs have joined with skyrocketing food prices (which we told you about last week) as the inflationary catalysts that are right now putting a big bite on household budgets.
As you and I both know, whenever a problem like this arises, the most-ambitious and innovative companies will seek to solve it – while making a hefty profit in the process.
By finding those companies, you get de facto “protection” from the problem itself, because you’re profiting from the solution.
We’ve uncovered one of the real winners – a Big Data firm that has a stranglehold on the U.S. rental market.
And we believe the company’s stock can double over the next three years …
There’s an old investing adage that tells us that there are many, many reasons for CEOs and other corporate insiders to sell their shares.
But there’s really only one reason to buy: They see a chance to make money.
I was thinking about this bit of stock-market wisdom just the other day after noting that a tech-sector CEO who I know made a move with his own company’s shares.
I’m going to tell you who the CEO was in just a minute – and I’ll also share details of the move that he made. Because once I disclose whether he bought or sold, you’re going to want to make the very same move…
If you’re like most Americans, you’re being eaten alive by zooming food prices.
Thanks to a three-year drought in California – the state that accounts for between 85% and 99% of most of this country’s fresh produce – every trip to the supermarket has turned into a financial flogging for U.S. consumers. In fact, vegetable prices have jumped 50% in the past month alone.
If this bout of supermarket inflation were limited to produce, we could probably live with it.
But it’s everything.
Since 2011, Washington tells us that the general level of prices – Beltway-speak for “inflation” – have risen 6.4%. Ground beef is up about 17%, chicken more than 18% and bacon nearly 23%. The West Coast drought and a really lousy winter in the Midwest have combined to make a bad situation even worse.
Dairy prices are rocketing, too – thanks to growing demand from Asia, and particularly from China. The boom in exports – combined with the fallout from the drought here at home – have tightened the supplies of dairy products and have sent prices skyward. Although U.S. dairy exports have surged 19% by volume, they’ve zoomed by 31% by value – reaching $6.7 billion, according to the latest reports.
And I’m betting you feel the pinch every time you walk down the dairy aisle at your favorite supermarket.
Today I’m here to help ease that pain. I’ve found a food-related technology play that will put some of that money back into your pocket.
This is a profit play you can feel good about holding: The small-cap firm is a global leader in food and agriculture technology, and its offerings help make sure the food sector’s crops, animals and products are clean, safe and healthy.
In my book, that’s a winning combination …
Over the last couple of weeks, I’ve heard some pundits on TV refer to the current tech market as a “crash” in the making.
Don’t believe them.
Seems like whenever some big tech leaders get clipped, the “pundits” come out of the woodwork with all sorts of dire predictions.
To be sure, the Nasdaq is down about 5% over the last month. However, during the five-year bull market, we’ve seen short-term drops of about 10% at least four times.
And yet, in each of those cases, the losses evaporated in just a few weeks as tech inevitably led the market higher once again.
Here at Strategic Tech Investor we look at declines as great buying opportunities that, if handled correctly, can help you build your net worth.
So today I want to show you four investments that you can make right now to turn the market’s recent turmoil to your financial advantage.
Last July, I told you about a great way to get two stocks for the price of one through corporate spin-offs.
You may recall that this is a process in which a parent company separates a business unit into a stand-alone outfit and then issues shares in the new operation to the public.
The great thing for investors is that by owning stock in the parent company they generally get shares in the spin-off automatically as special dividends, often tax-free.
At the time, I mentioned that a spin-off from computer storage leader EMC Corp. (NYSE: EMC) should do particularly well.
The spin-off company, Pivotal Inc., marks its one-year anniversary this month as it continues to gain traction in the Internet realm.
And that means EMC is getting traction, too.
Lots of traction, in fact.
And that makes EMC a stock that we want to own.
Let me show you why…
While some folks are worried that the big drop in PC sales would send the semiconductor business into a nosedive, it’s actually one of the hottest markets around the world today.
Sales of microchips are at multi-year highs, driven by major new trends that are reshaping the global tech landscape – including Big Data, The Mobile Wave, Cloud Computing and Sensors – all of the things I’ve been telling you about here at Strategic Tech Investor each week.
Semiconductors are also essential to the operation of smartphones, tablets, satellites, TVs, even wearable technology – one of the industry’s biggest new breakthroughs.
All of which make semiconductors one of the best places to invest your money.
And today I’m going to show you a unique way to play the industry’s surge for big gains – even while armoring yourself against the sector’s notorious volatility.
In Plato‘s Republic, protagonist Socrates takes the Delphic aphorism “Know Thyself“ as his personal motto.
It’s a great motto … especially for investors.
As a market veteran of many years, I can tell you that this is one of the biggest weaknesses most investors have.
They don‘t know themselves …
I watch as folks take losses and miss out on profits – mistakes they could have easily avoided if they’d only taken the time to know their investing personalities just a little bit better.
So today I want to demonstrate how to transform yourself into the “Socrates of High-Tech Investing.”
It’s easier than you’d think.
And the profits you’ll reap will make it well worth your time.