Dear Strategic Tech Investor Reader
As the year comes to a close, I thought it was a good time to dig into the mailbag one last time in 2015 and take on a few of the questions you’ve all been asking.
Before we do that, however, let me tell you how much I love unearthing the best investments in high tech – and helping you all make a lot of money.
To me, it’s something of a calling. I watched my mom go from struggling financially to living a life most people only dream about – and she did it through investing in technology.
So I’ve seen firsthand just what a dramatic impact wise investing can have on individuals and families. And I want that to happen for all of you as well.
Let’s get started with a question about Apple Inc. (Nasdaq: AAPL),a company that’s become something of a barometer for the entire tech sector.
Over the past two years, I’ve recommended the company as a “Strong Buy” several times – but Apple’s share price has had a rough 2015.
Understandably, you all want to know what’s going on…
And whether I’m still on board with the stock…
Answering Your Critical Questions
Q: Do you still believe in Apple? Why it has it headed down lately.
A: Yes, John, I still very much believe in Apple.
The company continues to boost profit margins and increase revenue. Moreover, it’s pretty much been doubling sales of the iPhone in China, where it’s one of the more expensive brands in the market.
Under CEO Tim Cook, Apple has adopted an “ecosystem” approach. By that, I mean the iDevice King keeps coming out with new products that fill in holes – and work seamlessly together. I’m talking about the new Apple Watch, an updated Apple TV, a new music streaming service and increased use of iCloud as examples.
The stock has been on a tear over the past five years, rising 145%. However, in this year’s volatile market, investors have been taking profits. That’s been keeping the price down in the short term.
But Apple is still a great – maybe the best – long-term tech play.
I’ve also gotten several questions regarding The Million Dollar Tech Portfolio. That’s the five-stock/two-fund bundle of investments that I gave you all in March. Mostly, your queries boil down to one main question:
Q: Why don’t you provide more regular updates about the seven investments in The Million Dollar Tech Portfolio?
A: The idea behind that special report was to give people a road map to get started in tech investing. While I follow up on it regularly, this service doesn’t provide hands-on stock management.
Of course, I do offer that kind high-level service for my two other services: Nova-X Report and Radical Technology Profits. In both, I send out specific “Buy” and “Sell” orders as well as (at least) weekly updates.
Even in this rough market, the Nova-X Report Portfolio is up more than 15% on open positions. And Radical Tech‘s open positions are up 35%.
Q:I first bought Microsoft in 1995. I regret listening to the “experts” and selling two-thirds of my shares a few years ago because, they told me, PC sales were “dying.” Microsoft still had – and has – a great deal of life to it. It’s now in the Dividend Reinvestment portion of my personal portfolio – where it will stay.
The moral of the story: If you have great quality stocks, hold on to them, not for quarters or a year, but for many, many years – and don’t listen to “the experts.”
A: Bob raises a great point – and it’s one I’ve been making for several years. With all the noise out there from Wall Street these days, it can be difficult to focus on the long run. This is why I developed Your Tech Wealth Blueprint.
As Rule No. 2 of the tech-wealth guides found within that blueprint says, you need to “Separate the signals from the noise.”
Here’s why: If you just looked at PC sales, as some of those “pundits” suggested, you’d miss the fact that Microsoft has become a huge play on the growth market for cloud computing and has doubled sales in that sector in less than two years.
Microsoft now ranks second behind Amazon.com Inc. (Nasdaq: AMZN) in what’s known as a “public cloud,” meaning the company runs computer networks for offsite clients. Just think – two years ago, a lot of the “experts” Bob B. is talking about said to avoid Microsoft because it had missed out on the massive shift to the cloud.
Q: First, you say Facebook shares would double in value by 2018 – three years. Then, you say you’re only looking for $250 by this time in 2020 – five years. Which is it? Three years or five years?
A: First, let me apologize if that portion of the column caused any confusion. Here’s what I said: “Facebook’s earnings will double in the next three years and double again three years after that.”
I was specifically talking about its earnings growth, not its share price.
Based on its earnings growth alone, we could see a Facebook share price of $424 by 2021 because earnings are doubling every three years.
However, to be cautious in my prognostication, I cut Facebook’s potential share price back by 40% and gave it a five-year time line to get to $250.
Hope that clears things up.
Q: Is Harman a “Buy” or a “Sell”? I checked, and one of my charts said it was a “Sell” – or sell it short for a bit.
A: Your charts may tell you otherwise, Stan, but I have Harman as a “Buy.”
We’re in the midst of tech-driven automotive boom. People are going to dealers en masse and leasing rather than buying because they want to keep up with all the great new auto technology that’s coming out.
For that reason alone, Harman looks good for the long haul. We’re probably going to close 2015 with record new vehicle sales, of around 17.5 million units. While car sales may slow down in the next couple of years, the drive toward the “connected car” – in-dash infotainment systems, self-driving functions, backup cameras, etc. – will not.
More than 25 million vehicles on the road today feature Harman auto technology. And its clients include such powerhouses as Ford Motor Co., BMW, Honda Motor Co., Fiat Chrysler Automobiles, Volvo, Daimler and General Motors.
Now, let’s close out this conversation by discussing something just about everyone is talking about now – the presidential campaign.
On Sept. 30, I introduced you to Carly Fiorina – and I told you why I think her candidacy is so important tech investors. That’s because Fiorina hails from Silicon Valley and is the former CEO of the Hewlett-Packard Co.
That report ignited more political passion than tech-wealth yearnings among you folks. Further, one reader questioned my basic thesis that we need a tech expert in the White House.
Q: As far as Carly Fiorina being a tech person and that helping the tech growth, I think that a strong economy would do more to grow the country in general than just focusing one sector.
A: Tom raises a good point. Yes, we need growth beyond the tech sector that can add more jobs, especially for young people. But we are now living in what I call the “convergence economy.”
And so, I think we need someone in the White House who understands how e-commerce, semiconductors, advanced sensors, smartphones, the connected car and more are overlapping each other and advancing our entire society – and economy.
Because of that, I’d like to see someone as president who has a substantial business background.
And that’s why I’ll be watching the big Republican debate tonight. I want to see if Fiorina takes on the poll leaders – Donald Trump and U.S. Sen. Ted Cruz – or if she fades into the background with the also-rans?
I also want to see if the candidates talk about what I think is the biggest issue facing the United States at the moment.
I’m talking about America’s crumbling infrastructure.
When it comes to taking care of our railroads, water pipelines, ports, dams, bridges, airports and roads, we’ve gotten way off track. Across the country, these absolutely essential pieces of our transportation system are literally falling apart.
It’s a huge issue that Donald Trump has been talking about it since the early days of his campaign.
You see, Trump is invested in a tech firm that’s a key player in the $57 trillion effort to finally transform the infrastructure of the entire world. This Silicon Valley player recently developed an advanced new technology that’s going to make all sorts of infrastructure work easier and more efficient.
And it could return investors 208% in the short term.
To find out more about Trump’s investment – and how you can get in on it, too – take a look.
And then watch Trump, Fiorina and the rest of the Republican lineup face off later tonight.
Before that, though, let me send big thanks to all of you who follow this service – whether you check in twice a week or more occasionally.
Strategic Tech Investor couldn’t be a success without all your support.
I hope you’ll continue to join me here as we work together to put you on the road to wealth.
- Strategic Tech Investor: The Million Dollar Tech Portfolio.
- Strategic Tech Investor: 3 Tech Stocks That Are Defying Wall Street.
- Strategic Tech Investor: Your Tech Wealth Blueprint.
- Strategic Tech Investor: The Second Rule for Grabbing Massive Tech Profits.
- Strategic Tech Investor: Is It Too Late to Double Your Money on Facebook?
- Strategic Tech Investor: This Mid-Cap Company Connects 25 Million Cars – and Beats the Market by 79%.
- Strategic Tech Investor: The One Candidate Hotter Than Donald Trump Hails From Silicon Valley.