Editor’s Note: There will definitely be some tough challenges out there with the COVID-19 pandemic still sweeping the globe, but you still have the chance to take steps to protect your wealth, and even come out ahead.
D.R. Barton is a trading expert, and now he’s bringing you Take Back Your Wealth 2020, a summit to show you how you can take control of your financial future. He’ll be bringing you the techniques and strategies that regular folks have been able to useto make total gains (including both winners and losers) as high as 1,359% since October, and that could double your money as often as every 9 days on average. If you want to learn all about it, click here to reserve a spot, because it’s all getting started tomorrow. We’ll be sending you all the updates and information that we think you’ll be most interested in.
At times like these, I like to remind investors about my friend “Pete.”
I last told you about him and the colossal mistake he made in our Dec. 15 chat.
You may recall that the former Wall Streeter actually passed on Apple Inc. (AAPL) in the summer of 1997 because he felt the storied computing firm had already seen its best days.
Of course, we now know that Apple is one of the great investing success stories of all time.
I’m bringing this up today because I see a similar mindset taking hold among investors. After a rapid selloff in February and March, the market has been rebounding nicely.
And yet, many are afraid to pull the trigger, even on a company as valuable and built for the long haul as Apple.
Apple’s Solid Foundation
Now then, let’s be clear. We’re not getting the opportunity to buy the stock for pennies on the share as you could have back in 1997.
At the time, Apple looked like it was headed for bankruptcy. Today, despite the recent selloff and an impending recession, the firm still has plenty of cash in the bank and boasts a market cap of nearly $1.2 trillion.
Please don’t think I’m being naive. I realize all too well that Apple faces some challenges ahead. But I believe they are short term in nature and brought on by the coronavirus panic.
Yes, the factories of Apple and its suppliers were shut down for several weeks as China went into quarantine.
In fact, Apple was one of the first to announce that the COVID-19 outbreak would affect its business. It also decided to close all its retail stores, first in China, then in the rest of the world.
But those factories and stores in China are back online, and Apple seems at worst a few weeks behind on the supply side.
Let’s look at the challenge from the customer demand side. Two-thirds of Apple’s sales come from the U.S. and Europe, areas that have been under heavy economic lockdowns for several weeks.
But here at home a $2.2 trillion stimulus bill – the largest in American history – was recently signed into law. I believe this will go a long way towards reversing any damage.
And remember, not only is Congress talking about another stimulus bill, the Fed says it will pull out all the stops to get the nation moving forward quickly.
Meantime, Apple watchers like me say it’s a good bet the firm won’t release its news iPhone until around Thanksgiving. I’m happy to report I still see plenty of demand for Apple’s signature smartphone.
The reason is simple: 5G broadband wireless.
The New Standard in Wireless Connections
See, the newest releases are expected to include the first-ever 5G-enabled iPhones. 5G is the next generation of wireless communication. It promises to boost download speeds by 10 times or more compared to existing 4G LTE networks.
Even better, 5G will reduce congestion and improve signal strength and clarity. It also will cause massive shifts in how we use our smartphones.
With much faster connections to the Internet, iPhones will be able to leverage smarter AI, use Augmented Reality to provide real-time information about our surroundings, and much more.
This jump to 5G is what will drive people to upgrade their iPhones, as many have waited for this generational shift before replacing their older phones.
Remember, Apple sets the standard by which the rest of the mobile world is judged. For that reason alone, industry analysts expect the 5G iPhone to serve as a catalyst for the whole field.
But more important than that for tech investors is the fact that Apple is today much more than just a hardware company.
An Endless Revenue Strategy
CEO Tim Cook has been slowly shifting away from hardware, toward services instead. That’s looking like a very smart decision right now.
Even as rivals such as Samsung, Huawei, and others struggle with supply issues in China, Apple’s service strategy is not heavily affected by hardware sales or factory closures.
Instead, Apple bills monthly fees for things like:
- Its video streaming service, Apple TV+,
- A music streaming service, Apple Music.
- And it’s storage and device syncing service, iCloud.
These are all very “sticky” services, meaning that they are convenient and cheap enough that people tend to stay subscribed. But multiplied by Apple’s millions of customers, they add up to a pretty penny.
In fact, in the 2019 holiday quarter alone, Apple’s service revenue was a record $12.72 billion, up 17% from the year before. The company expects to generate a whopping $50 billion in sales from the service segment alone in the next few years.
And keep in mind that Apple’s services synergize with their hardware. Once you buy Apple devices, you tend to start using their services to store all your content, play games, use Apple Pay, and so on.
This pulls people into Apple’s ecosystem – and keeps them there.
Put simply, Apple is just one of those stocks with the resources, expertise, and history of bouncing back from big storms like the coronavirus panic.
Now you know why I still see plenty of upside ahead. Over the past three years, Apple has grown per-share earnings at 16%.
I believe it can maintain that pace for years to come. But I am expecting to see some coronavirus impact when it reports earnings on May 5.
Even it if misses this quarter and the next, Apple is set to resume its long-term earnings growth. At that rate, the stock could double again in roughly 4.5 years.
It’s like I keep saying. If you want to become a stock-market millionaire, you have to be in tech.
And you should at least have Apple on your watchlist because you can count on it for years to come.
But if you’re looking for a shorter-term opportunity to take advantage of, there is another market out there that is brand new. It’s also been able to give its investors returns as high as ten times in less time than they thought possible.
And best of all, it’s separate from the traditional markets, and it has the potential to chart its own course, apart from the instability that broader equities have been facing.
Tom Gentile, a top-flight trading expert, is ready to share his expertise in this emerging market with you. All you have to do is click here to get started.
Cheers and good investing,
Michael A. Robinson