Archive for May, 2014
Back on Feb. 21, in the report “My ‘Sominex Strategy’ for Big Profits In This Rocky Market,” I explained why I was projecting an exceptionally volatile stretch for tech stocks.
And I even showed you the investment strategy to use to traverse it.
I did all this for one reason: I just knew that a strong tech rebound would follow. And the investors who stayed in the game would cash in big when that resurgence began.
I’m relating this story for one reason: This “new tech wave” we predicted has begun.
And today I’m going to show you exactly how to ride this rebound for maximum profit …
AT&T Inc. (NYSE: T) made big headlines with its agreement to buy DirecTV (Nasdaq: DTV) in a cash-and-stock deal worth $67.1 billion.
Takeovers can provide huge windfalls – if you own the stock beforehand.
But this deal offers you the rare chance to profit after the fact – if you know where to look.
Today we’re going to tell you about a “backdoor” play on the AT&T/DirecTV merger.
And you won’t believe where we’re traveling to look.
Now that sailing season is here, I’m thrilled to get back out on the water.
I can’t overstate how big a role sailing has played in my life. I discovered the sport in my early 20s and have passionately pursued it ever since.
For me, sailing is a way to relax.
For others, it’s a way to compete.
I’ve always admired the folks who compete in the America’s Cup and other yacht races. These sailors remind me of the Silicon Valley entrepreneurs that I’ve been watching and dealing with for 30+years. Like competitive sailors, entrepreneurs are always looking for an edge – anything that can make them smarter, nimbler … and better.
In yacht racing, that “edge” might come from something as simple as a lighter sail or as complex as new hull configurations derived from supercomputer modeling.
That lighter sail might increase a yacht’s speed by only half a knot. But that seemingly miniscule difference can be all that’s needed to win a race.
In Silicon Valley, hardware manufacturers for decades have sought that “edge” in a high-tech axiom known as Moore’s law.
This rule of thumb, proposed way back in the 1960s by Intel Corp. cofounder Gordon E. Moore, tells us that computing power doubles every two years or so. The reason is simple: As technical know-how and production methods get better and better, the number of transistors on integrated circuits doubles during that same two-year time frame.
That “law” puts one particular group of companies – semiconductor-equipment firms – in a very powerful position. And one specific company just last week divulged an invention that’s only going to add to its marketplace muscle.
This company is already a market leader – and you won’t find a better time to invest.
Let’s face it … even though we aren’t seeing images of mass starvation every night on CNN, we’re heading for a food crisis so deadly that it’s hard to even picture.
Just this week, in fact, a quick perusal of the Web led me to reports on major food crises playing out in Somalia and South Sudan, an only slightly less severe food shortage squeezing Venezuela and a forecast of a ruinous disaster that will span the globe by 2050.
And if global food consumers and producers maintain their present course, I believe there will be plenty to fear.
The ingredients of an epic disaster are all there. You’ve got water conflicts and shortages throughout the world, an exploding global population (7 billion and growing) and escalating shortages of arable land.
In a special report back in 2008, the United Nation referred to this as a “silent tsunami” of global hunger – and correctly predicted it would only get worse. Today, the UN estimates that about 870 million people remain undernourished – 100 million of them children under 5.
A crisis like this is easy to dismiss – out of sight/out of mind and all that …
But the fact is that we’re getting some early warning signals here in the United States, where a three-year California drought and the lousy winter in the Midwest Dairy Belt have been an inflationary one-two punch for produce and dairy prices.
According to the U.S. Labor Department, wholesale food prices jumped 2.7% in April, the fourth straight monthly gain. Meat prices zoomed 8.4%, the most since more than a decade ago. And the prices of some fruits and vegetables soared as much as 50% in a single month.
The solution to these seemingly intractable problems has always been to throw money at them in the form of more and more aid.
But there’s another answer.
We can devote high-tech resources to the problem.
In fact, this is one of those great opportunities where we can employ high tech to avert a looming world disaster – and reap a windfall profit in the process.
This particular form of high tech is something I like to refer to as “Smart Ag.” And I’ve identified a company that is ready to cash in …
Just as we’re about to celebrate what I consider the seventh anniversary of the smartphone – Apple Inc. (NasdaqGS: AAPL) launched the iPhone on June 29, 2007 – there’s no shortage of “experts” who will tell you the category is already dead.
Ever since, about a year ago, Samsung and Apple began warning of a slowdown in smartphone growth, the gloom-and-doomers have been writing eulogies for the seemingly ubiquitous product.
For instance, Investor’s Business Daily recently said the market is “maturing” – concluding that formerly special devices like the iPhone and the Samsung Galaxy have reached “commodity” status.
Just a few months ago, TheStreet.com said the market is “rapidly losing its growth,” and predicted an even-more-drastic slowdown to come because of the sputtering Western Europe economy.
And earlier this year, market research firm IDC predicted a slowdown in worldwide smartphone shipments.
These predictions are way off target.
And I can prove it.
The experts study the smartphone-wielding crowds in cafés, airport terminals, sporting events, hotel lobbies and even supermarkets here in the United States, and conclude the market has reached the saturation point.
That’s not actually the case.
Besides, there are huge swaths of the world where most folks have yet to even hold a smartphone, let alone own one.
And this means there’s still a huge opportunity for global sales.
The IDC report I just mentioned actually shows this. The market-researcher estimates that smartphones sales hit roughly 1 billion units for the first time last year. And by 2018, it is projecting worldwide sales will zoom to 1.7 billion devices.
We’re talking about a market that’s going to zoom 70% in just five years.
And we’ve just identified the biggest beneficiary.
It’s a tech leader – a company that has a stranglehold lead on a smartphone component that will make this growth possible. And it just keeps adding to its product offerings and bolstering its technology to maintain its lead and keep its challengers in the rear-view mirror.
Best of all: It’s a stock we believe will double in price over the next few years.
And it’s one you want to grab now – before Wall Street gets wise.
It was Sir Francis Bacon who gave us the truism that “knowledge is power.”
And the 17th century English philosopher and statesman did so centuries before Wall Street was even conceived.
But the brokers, fund managers and other pros who dreamed up the investment markets knew a good thing when they saw it. They embraced Bacon’s maxim, launched the first U.S. stock exchange in 1790 and spent the next two centuries transforming this country’s individual investors into scared vassals of the Wall Street elite.
And the big banks, brokerages and other investment pros did this by never forgetting the simple precept that “knowledge is power.”
I see this play out on an almost-daily basis thanks to the endless streams of impenetrable reports that come from the bankers in New York or our elected leaders in Washington.
Most Main Street investors lack the knowledge to “decode” these reports, so they also lack the power to respond in a constructive manner.
Instead most of us just react – panic really. An upbeat economic report prompts investors to shoot stocks higher one day. But on the next, a seemingly conflicting report causes share prices to plummet.
Wall Street isn’t fazed by this whipsaw trading, of course: As individual investors, we must travel the road that’s owned by the pros. And that means we must pay a “toll” – in the form of a commission or transaction fee – with every move we make.
In fact, there’s even an incentive to make us take more trips – heading north (bullish) one day and south (bearish) the next: The more trips we take, the more of those “tolls” that we have to pay – and the larger the pile of profits that Wall Street reaps.
Knowledge isn’t just power: It also represents profits… even wealth.
I’m putting such a fine point on this – and telling you about Francis Bacon – for a very specific reason: Thanks to the 30 years I’ve spent watching and working with Silicon Valley companies, I long ago “cracked the code” that gives Wall Street so much power over America’s Main Street investors.
I’ve identified the three specific economic reports that matter – and have deciphered what they mean. And I know which ones are just claptrap – mind-numbing clutter – designed to maintain the very-one-sided status quo.
And today I’m going to give you a backstage pass… so you’ll have direct access to that “knowledge” – and the “power” profits that accompany it.
Back in the late 1990s, my wife was expecting our second daughter and we were really anxious to buy a home.
But the real estate market was soaring … prices were insane.
I can’t tell you how many times we lost out on a house we really liked because some other buyer was willing to pay 25% or more above the asking price – or was an “all-cash” buyer.
I never play that game – and never pay more than list.
Although real estate agents urged me to “look at the market” and “play the game” to get into a house, I refused. Overpaying, I knew, might work in the moment. But when the market got back to normal, I’d be left owning a house that was worth less than I paid for it.
You just can’t make money that way.
As it turns out, we ended up buying a great house for thousands under the asking price. Not only that, but the agents cut their commissions to make the deal and actually paid us cash to move in.
I’m telling you this tale for a reason.
My story underscores the importance of managing risk in a turbulent market.
And what’s true of real estate is just as true for stocks, including tech stocks. At their core, houses and tech stocks are both financial assets. Managed recklessly, they can drive you into the poor house.
But managed skillfully, they can make you rich.
During my 30 years as an investor, I’ve developed five tools for turbulent markets. Through the years, they’ve always turned the table to my advantage.
And today I want to share them with you.
With the Nasdaq Composite Index – and tech stocks in general – going through a turbulent stretch of their own, these five rules will help keep you from making mistakes.
My five rules will help you navigate the choppy markets we’re seeing right now.
And, in the long run, they will help make you wealthy.
Apple Inc. (Nasdaq-GS: AAPL) just announced a historic 7-for-1 stock split that will drop the price of Apple shares from about $600 all the way down to about $86.
Just weeks before, search giant Google Inc. (Nasdaq-GS: GOOGL) unveiled a split of its own – a 2-for-1 reapportionment that halved the price of this “Thousand-Dollar Club” stock, meaning you can now snap up shares at a more-affordable $530 each.
While academics typically dismiss stock splits as “book-keeping” maneuvers that have little actual impact on the underlying profit opportunity, retail investors usually get pretty stoked when a “name-brand” stock announces a split.
This time around it’s the investor – not the expert – who has the right take on this.
Today I’ll explain why. And I’ll also show you how these two particular splits can give your investment portfolio a nice little additional jolt.
I know that you’ve been reading about the huge tech sell-off. And I’ll bet that a lot of the coverage you’ve perused has been emblazoned with such alarmist headlines as “the death of the Nasdaq” and “the end” of the tech bull market.
Well, I’m going to let you in on a secret.
Investors haven’t stopped buying tech stocks.
They’re just buying different tech stocks than before.
In essence, what’s happening is that the big-money investment pros are shifting out of the high-flying “momentum” stocks that have led the Nasdaq Composite Index higher over the last two years. And they’re shifting into more value-oriented tech issues – especially the companies that offer solid growth augmented with a nice dividend.
Friends and colleagues who ask me about tech are surprised to hear me say that I’m still very high on the tech sector.
In fact, I’m still celebrating.
You see, I know that all these momentum stocks will eventually come back: They’re growing too fast and are too important to our economy not to rebound.
In the meantime, there’s a whole new slice of the tech-stock market we can use to bolster your net worth. And I’m going to tell you about one great candidate today – an investment I believe can gain as much as 75% over the next three years.
And get this: It trades at $9 a share… and its dividend payout is a whopping 11%.