Add These 2 Stocks to Your Portfolio as the Tech Rally Goes Global

2017 will likely be remembered by investors as the year of the big rally in technology stocks. Unlike 1999, this year’s gains were powered by more than hype. As I’ve written a number of times, earnings for these firms have been fabulous.

In the third quarter of 2017, S&P technology companies had an earnings growth rate of about 21%. That kept the sector’s P/E ratio in the 20 range. Quite a contrast from early 2000 when it the forward price-to-earnings ratio for tech stocks was a whopping 52.

An even bigger story for 2017 was how the tech rally went global and how all the global tech giants became even bigger. Overall, tech stocks globally are up about on average about 42% year-to-date. That is roughly double the gain for the broad-based MSCI AC World Index.

Global Tech Stock Rally

And here’s an even more amazing number for you to contemplate… as of the day before Thanksgiving, just eight companies had gained an incredible $1.4 trillion in market capitalization in 2017. That was likely on the back of investor expectations that the big will only get bigger thanks to their huge user base, large cash piles and access to data on consumers.

Here is the list of these eight companies, starting with five American names you’ll recognize:

Apple (Nasdaq: AAPL)

Amazon (Nasdaq: AMZN)

Netflix (Nasdaq: NFLX)

Alphabet (Nasdaq: GOOG)

Facebook (Nasdaq: FB)

…along with the three Chinese tech powerhouses:

Alibaba (NYSE: BABA)

Tencent (OTC: TCEHY)

Baidu (Nasdaq: BIDU)

Of the top 10 companies globally by market capitalization, the first seven are all very familiar technology names – Apple, Alphabet, Microsoft (Nasdaq: MSFT), Amazon, Facebook, Tencent and Alibaba.

No real surprises here. But here is something that may surprise you. . . . .

China Tops the U.S.

That is the fact that the top Chinese tech stocks have easily outpaced the FAANG stocks in 2017. I brought these stocks to readers’ attention earlier in an article on the so-called BAT stocks – Baidu, Alibaba and Tencent.

This differential came to the fore last week when, at least temporarily, Tencent surpassed Facebook in market capitalization. It became the first of the Chinese tech titans to surpass $500 billion in valuation. It temporarily pushed Facebook out of the top 5 globally in market cap.

Tencent (up 121% in 2017) is a fitting champion for what China is becoming in the 21st century. Its services are ubiquitous in China with more than half of the 980 million users of its WeChat platform spending over 90 minutes daily on the app chatting, playing games, listening to music, paying bills, ordering food, etc. Its QQ social network platform also has about 900 million users.

However, Tencent gets two-thirds of its $32 billion in annual revenue from gaming, with hit games like Honour of Kings ‘printing’ money for Tencent. People download games, buy add-ons like virtual weapons and sign up for digital media options like its YouTube-like video service.   

Not far behind Tencent is Alibaba, which is up 118% year-to-date and has a market cap of nearly $490 billion. The e-commerce giant will most likely become a member of the exclusive $500 billion club very soon.

And while the U.S. financial media went gaga this week over Black Friday and Cyber Monday, the financial press around the world is still talking about the world’s largest online shopping day – Singles’ Day in China.

Back in 2009, Alibaba started the Singles’ Day sales event and it has grown to enormous proportions, benefiting chiefly Alibaba. This year it set another record, with $25.3 billion in sales (a 39% increase from a record 2016) for one day! In a side note, 90% of these sales were conducted via a mobile phone.

Both Alibaba and Tencent dominate another red-hot area of growth in China – e-payments. Stocks here in the U.S., such as Square and Paypal, have soared this year on the back of the move toward e-payments. But in China, the e-payments sector is like Square’s and Paypal’s growth on steroids. China is the world leader with volumes in 2016 rising nearly fivefold to $8.8 trillion, according to iResearch.

Currently, Alibaba is number one in the sector, as its Alipay unit has a 54% market share. But Tencent’s WeChatPay is closing fast with a 40% market share.

Related: 2 Payments Company Stocks Heating Up

The story holds true in the digital advertising space as Alibaba still dominates the sector, with Tencent steadily closing the gap. By 2019, Tencent’s ad revenues are forecast to hit $11.4 billion, which would be a 15% share of the digital ad space in China.

Don’t Be Afraid

I am happy to say that I’ve owned both of these stocks for a while. And you should not be afraid to own them just because they’re Chinese companies. Here’s why…

First off, the Chinese government has specifically stated it wants technology champions that are recognized globally. So while the government may poke its nose into corporate business once in a while, it’s not about to kill these two golden geese.

More importantly though is the growth of China’s middle class, which is doing most of the consuming and generation of revenues for both Tencent and Alibaba.

According to a study by the consultancy McKinsey & Co. 76% of China’s urban population (currently 750 million) will be considered middle class by 2022. In 2000, only 4% of that population was considered middle class. That translates to 550 million people, which would be the world’s third most-populous country.

China’s consumer economy is forecast to grow by 55% by the end of the decade to $6.5 trillion. That would be an increase of $2.3 trillion or the equivalent of 1.3 times the current German consumer market.

With these sort of economic tailwinds – and the sheer numbers working for you (China is so much larger than the U.S.) – both Alibaba and Tencent should continue their winning ways into 2018.

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My Thanksgiving Conversation With Johnny Shines a Light on the Real Reason to Invest in Bitcoin

My Thanksgiving was full of good cheer, as I expected. The food followed the usual script: The dark meat was better than the white… the stuffing was better than the mashed potatoes… and the pies were amazingly good.

What was different? A new topic dominated the conversation.

Yep, you guessed it: cryptocurrency.

I sat next to Johnny, one of my favorite people and a really smart dude. I don’t see him too often. I live in Maryland and he lives in Virginia. He commutes to Texas every week, working for a global energy company. His specialty is oil. This week he’s in London. Next week, who knows?

We began talking oil, then North Sea oil, then Norway’s huge oil windfall, then its $1 trillion sovereign wealth fund, grown this large thanks to oil revenues. At this point, I commented, “It’s going to be interesting to see whether the fund will invest in bitcoin, some other cryptocurrency or a blockchain-based company.”

The Case Against Bitcoin

Johnny said, “Those cryptocoins? They’re awfully risky, aren’t they? Why would the government of Norway invest in those?”

Johnny was just getting started. He proceeded to cover the entire spectrum of reasons why he wasn’t buying into that “crazy crypto bug.”

When he stopped, he looked at me in anticipation of… what? A fierce counter-offense? A point-by-point refutation? Anything I could tell him about cryptocurrency that would change his mind right there and then?

Well, none of that happened. Instead, I said, “You’re mostly right.” And I meant it.

When he said that bitcoin was new and largely unproven, he was mostly right. Compared to gold, it was born a minute ago. Compared to most fiat currencies, bitcoin is still in its infancy.

On the other hand, it’s proven to help millions of people who use it to transfer money. It’s a proven store of value to millions of users trapped in countries with runaway inflation, like Venezuela.

But its track record is relatively brief. Johnny’s mostly right.

When he said bitcoin wasn’t real, he was also right. It’s a man-made fabrication, a convenience, a proxy for value, just a piece of code that represents value.

Of course, paper money is also a convenience (though one backed by sovereign governments). Bitcoin is faster and cheaper to use and is backed by thousands of computers around the world that track the bitcoin blockchain and ensure it’s not abused.

When he said that bitcoin was in a bubble, he was roughly right. Not that the current bullish sentiment lifting bitcoin’s price to new heights is wrong. But sentiment can be fickle and can turn against an asset class, driving prices down as quickly as they had gone up. Who am I to say that bitcoin is immune to such a reversal? Of course it’s not.

When he said that bitcoin was like a ship with no captain, he got that right too. But it’s not all that different from the internet. No single organization or entity controls or guides the internet. Blockchains (sometimes called the interchain), the technology behind bitcoin and other cryptocurrencies, is just as freewheeling… and unpredictable.

Invest Like a Business Would

As I said, for the most part, Johnny was right.

It was his conclusion that was wrong.

One thing I’ve learned as an investor through the years is that you can always find a reason NOT to make an investment. There’s no such thing as the “perfect investment” or the “sure thing investment.” There is risk and uncertainty in every investment. It’s the differences in levels of risk and uncertainty that give asset classes their unique attributes.

Bitcoin certainly has its share of risk and uncertainty. No bitcoin enthusiast would argue otherwise.

And it would certainly be foolish to invest all your money or too much of your money in bitcoin. But none?

This is where Johnny and I part ways.

Here’s the wrong way to look at it: If you’re risk-averse, don’t invest.

Here’s the right way: It would be extremely risky NOT to give yourself at least some exposure to the cryptocurrency space.

Investors who think otherwise need only look at what businesses are doing. These entities don’t experience our emotional ups and downs. They make cold-blooded business decisions. And they have to grapple with the same uncertainties investors do.

The blockchain technology is unproven and in its infant stages. Businesses aren’t sure if infrastructure and digital identity problems can be solved in time to allow industries to adopt tokenization on a massive scale.

The road forward is strewn with obstacles. Businesses can’t see the future of cryptocurrency any better than you or I can.

But, ready or not, hundreds of companies in industries such as banking, insurance, technology, international trade and healthcare are spending millions of dollars on exploring and developing blockchain technology to make transactions more transparent, timely and secure.

Here’s the thing: They can’t afford not to.

If massive tokenization of industries does take place, businesses simply can’t take the chance of being left behind.

And neither can you!

Early Is When the Serious Money Is Made by Serious Investors

At this very moment, tokens are funding the rollout of hundreds of decentralized (and disruptive) technologies.

A few examples include cloud storage (Filecoin, Storj), digital advertising (Basic Attention Token, adToken), marijuana (PotCoin) and dentistry (Dentacoin).

Sure, it’s early. But it’s not too early to capture some exposure to the cryptocurrency space. Whatever fits your comfort range, be it investing 1%, 3%, 5% or 10% of your investible savings, DO IT NOW. It’s not too late, but sooner is better than later.

Because investing early is how you make big money. It’s at the heart of the investing premise we take very seriously here at Early Investing. By writing just a modest check today, you’re giving yourself a chance to reap a huge financial reward down the road.

So let me share with you a piece of advice I’ve been giving to the paid members of our First Stage Investor service…

I don’t care who you are or what your investment goals are, you cannot afford to ignore [cryptocurrencies] and ICOs.

Message delivered. Now go ahead and enjoy your leftover turkey!

Good investing,

Andy Gordon
Co-Founder, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Source: Early Investing 

4 Cryptocurrencies to Buy If You Missed the Boat on Bitcoin

Not known for providing conventional trading dynamics, bitcoin prices again shocked the world, this time exceeding $8,000. At this juncture, we may be standing on a critical inflection point. For those that believe that cryptocurrencies are in a bubble, the present bitcoin prices are a perfect argument. But to crypto supporters, the dramatic rise only proves the viability of the digital markets.

I’ve written extensively about cryptocurrencies, and I’ve traded them as well.

But even I have to admit that the meteoric skyrocketing of bitcoin prices is a shocker. I’m not so surprised in terms of nominal targets: a few months back, I wrote about the not-so-crazy case for $10,000 bitcoin. My InvestorPlace colleague, Will Ashworth, did the same. Rather, the speed at which bitcoin prices accelerated caught me flatfooted.

Obviously, I stand with virtual currency supporters. My personal view is that if cryptocurrencies were a bubble, it would have popped by now. While I get why investors are hesitant to jump onboard what appears to many as internet tokens, we shouldn’t underestimate how much information we have available today.

If Google was around during the tulip-mania era, I doubt that so many people would have lost their life savings. And in the same logic, we hear so many stories about bitcoin prices being unsustainable. This is a bull market that has had every opportunity to collapse.

Still, bitcoin prices today represent a considerable risk. Not too many can afford to plop down more than eight grand for a single coin. But if you feel that you missed the boat, don’t worry! The following cryptocurrencies are much more reasonably priced, and have greater return potential. 

Cryptocurrencies to Buy: Bitcoin Cash

Source: Shutterstock

Cryptocurrencies to Buy: Bitcoin Cash

On Aug. 1, 2017, virtual-currency investors learned firsthand the strange beauty of a “hard fork.”Yes, I’m sure the granular programming details are sublime for tech geeks. However, most folks recognize this date as the day when they received “free money.”

Bitcoin Cash was born as an offshoot currency from Bitcoin. In recent years, the enormous popularity surrounding cryptocurrencies meant that the original digital token could not satisfactorily handle transaction volumes. Bitcoin had to be upgraded, but as a decentralized platform, this would require consensus. That consensus never came, resulting in a new platform: Bitcoin Cash.

For Bitcoin holders prior to the hard fork date, they received an equivalent unit of Bitcoin Cash. At first, the offshoot currency soared to the moon, and then crashing down. Now, it’s back up to the moon, or nearly $1,200.

But more so than free money, Bitcoin Cash does indeed solve Bitcoin’s onerous and costly transactions. One of the personal oddities that I’ve experienced is that the original token doesn’t scale its transaction cost. It doesn’t matter if you want to send $1 or $1,000 of value — the cost is the same.

The other problem is that Bitcoin’s transaction speeds are deathly slow. Several years ago, transactions were nearly instantaneous. Now, it’s not unusual to wait days for your payments to go through. It’s maddening, which is why Bitcoin Cash could really be the next Bitcoin.

Cryptocurrencies to Buy: Ethereum

When Bitcoin first emerged, early adopters viewed it as an alternative payment mechanism. That obviously caught the attention of unscrupulous characters, who used the medium for illicit purposes, outside of prying government eyes. But what if a cryptocurrency could do more than just transfer value from one party to another? This is where Ethereum comes into play.

Underlining Ethereum is the “smart contract” concept. This is similar to all other contracts except for one significant difference: no intermediary party, such as an attorney, exists. The terms of the contract are stored in a distributed ledger that is immutable. Furthermore, any contractually-bound payouts won’t occur until the agreed-to terms are fulfilled. Artificial intelligence essentially governs this process, which ironically, people trust more than human intelligence.

Because Ethereum has a much broader scope than Bitcoin, it arguably has greater potential. Financial institutions and big banks are analyzing how the Ethereum blockchain can reduce risks with dealings involving untrustworthy parties. Others are exploring its use as a supply-chain efficiency solution.

But the real reason why people are looking at Ethereum is the attractive entry point. Currently ranked at number two in terms of market capitalization, Ethereum’s total value is $35.3 billion. A $100 billion market cap isn’t unreasonable, considering this blockchain’s potential. If so, this valuation would imply a $1,000 price tag.

Cryptocurrencies to Buy: Litecoin

If you check its official website, you’ll discover that Litecoin is a “peer-to-peer” internet currency. In other words, Litecoin is just like Bitcoin, but without the drama or the scrutiny. And while it may sound dismissive to call Litecoin the silver to Bitcoin’s gold, the programmers have no issues. In fact, their site describes their cryptocurrency as a complement, not a competitor, to the original digital token.

Don’t get me wrong: Litecoin has a number of awesome features aside from being relatively “cheap” at $70. Primarily, the transaction speeds are much faster than its older brother, which is a huge deal. Remember, slow transactions were the primary catalyst for the Bitcoin Cash hardfork. Moreover, Litecoin has very reasonable transaction costs and purchasing costs from exchanges such as Coinbase.

Still, I think the biggest Litecoin driver is the price point. With Bitcoin prices going ballistic, Litecoin provides a psychologically easier path to public integration. Would you rather pay one Litecoin to pay your utility bills, or 0.00853 Bitcoin?

More importantly, as the Gen-Z demographic enters the workforce, they’re going to be interested in virtual currencies. They’ll consider Bitcoin prices way too onerous. But Litecoin at under $100 may be a deal too sweet to pass up!

Cryptocurrencies to Buy: Ripple

I don’t think it’s too much of a stretch to say that most people bought cryptocurrencies to avoid the banks. Why on Earth, then, would it make sense to buy a virtual currency owned by the banks?

The digital toke in question, Ripple, is a tough nut to crack. Not only is Ripple an extremely speculative vehicle (currently priced at 23 cents), it’s “theologically” controversial. On one hand, major financial institutions supporting the coin provides significant confidence and credibility. On the other hand, it could be an Illuminati trap, or something to that effect.

I personally view Ripple as a bigger, “badder” SWIFT network. A properly scaled blockchain platform has proved effective in transacting value quickly and efficiently. Ripple is exactly that — a platform that can meet the demands of tomorrow. Furthermore, banking institutions can’t afford to sit back and let the blockchain technology overcome them. Ripple is their answer.

At the same time, we have to acknowledge the risks. A good portion of the crypto community will not trust Ripple, so integration is a problem. More critically, nearly 39 billion of these coins are in circulation. If Ripple hits $1, its market capitalization would exceed Bitcoin’s by a wide margin.

It’s a crapshoot, but one worth taking with your speculative money fund.

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Source: Investor Place 

How to Invest Your Money in 2018

You’ve heard it a thousand times: Past performance is not a guarantee of future performance.

Yet, past performance is all we have to forecast the future. This is true everywhere. If you play fantasy football, you make decisions for next weekend based on past performance. When hiring or promoting someone, managers make decisions based on past performance.

So, it makes sense to consider the past when thinking about the future for the stock marketand how to invest your money.

I use several mathematical tools based on the past to forecast the direction of price moves. And my tools tell me 2018 could be a challenging market environment.

My 2018 Stock Market Forecast

The chart below shows my 2018 forecast for the Dow Jones Industrial Average.

My tools tell me 2018 could be a challenging stock market environment. Here's exactly how to invest your money in 2018 according to my analysis.

The forecast shows the direction of the expected trend, not price levels. For prices, I expect new all-time highs for major stock market averages in the first months of 2018.

This forecast is based on a combination of the recent price action and longer-term cycles. For example, one of the cycles is the presidential cycle. This is a recurring four-year pattern related to the president’s term in office.

According to a recent article in in The Wall Street Journal, the second year of a president’s term has the lowest average return. That includes data going back to 1896.

This is a great example of why you shouldn’t believe everything you read in The Wall Street Journal. The 20th Amendment to the Constitution moved the presidential inauguration from March 4 to January 20. That means the presidential cycle shifted slightly in 1937.

In the chart above, I combined the presidential cycle since 1937 with other cycles and then accounted for recent market action. The result is generally a more accurate roadmap for the year ahead than simpler models.

How to Invest Your Money in a Difficult Market

In 2018, we should expect a difficult stock market. The chart shows a trading range is likely to develop in the first months of the year. This will likely include at least one pullback of 5% or more.

Between April and June, a drop of 10% or more is likely. Treat that as a short-term buying opportunity. But be ready to sell quickly in September, where there is a high probability of a decline.

It’s too early to tell with certainty, but the decline I expect in September could be the beginning of a bear market.

A bear market beginning next fall fits with my forecast that the Federal Reserve is set to trigger a recession at its December meeting. I explained why in an earlier article.

But, as I noted then, the stock market tends to climb before a recession. The S&P 500 rose an average of 22% in the year before the past three recessions triggered bear markets.

The roadmap confirms my Fed recession indicator. This all means that now is the time to buy stocks, with a plan to sell next year when the bull market finally ends.

Over the next few weeks, I’ll go into more detail on my 2018 forecast.


My tools tell me 2018 could be a challenging stock market environment. Here's exactly how to invest your money in 2018 according to my analysis.

Michael Carr, CMT

Editor, Peak Velocity Trader

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How to Survive the Next Market Collapse

My father has a green thumb. He comes by it naturally through his father. With me, it skipped a generation.

But that doesn’t mean that I don’t love wandering around my father’s property as he points out his various plants and new projects.

From spring through fall, nearly every time I visited, he would have something new to show me as we walked the yard. Or “toured the lower 40,” as he calls it.

“Why all the moving around?” I asked him when he pointed out a set of hostas that had been split and spread to a new shaded bed.

“It’s about balance, Joce.” The giant blue hostas had spread and were threatening to take over their previous flower bed so that nothing else could grow.

While my father might have been talking about rebalancing his green space, that same idea can be extended to your own investment portfolio. And it’s more critical than you might realize. Rebalancing could mean the difference between surviving the next market collapse…

Your Gains Have Changed the Game

The stock market has put in a solid performance in 2017 despite endless talk of stocks being overvalued (which they very likely are) and bubbles expanding in several sectors (and they are).

The fact is that if you stuck with stocks in 2017, you are sitting on some nice gains.

The Dow Jones Industrial Average has gained 20% this year, and the tech-laden Nasdaq Composite is up roughly 19%. Even the small-cap Russell 2000 Index has rallied 12%.

In the commodity space, oil has tacked on 7%, and gold has grown an impressive 12% despite strength in stocks.

But those nice gains have created a serious problem within your portfolio, and it’s important that you address it sooner rather than later before a market collapse. It’s a good time to take a hard look at all those eggs you’ve gathered and figure out exactly how you’re going to redistribute them across many baskets.

It’s called rebalancing, and it’s going to be the key to keeping your wealth growing in the new year.

Rebalance and Stay Safe During a Market Collapse

We’ve all heard the old adage time and time again: “Don’t put all your eggs in one basket.”

And you haven’t.

You’ve wisely distributed your investments across a variety of sectors, investment vehicles, and possibly even countries and currencies.

Ted Bauman, editor of The Bauman Letter, has addressed the proper distribution of your investing portfolio across stocks, currencies, commodities and even rare tangible assets on numerous occasions in his newsletter. (He has also given tips on different asset protection strategies you can use for unique ways to grow your retirement nest egg. Don’t miss out!)

But the problem that occurs when you have different investments growing at different “speeds,” is that your distribution across many baskets becomes more lopsided than you intended.

Let’s look at an example.

Say you started with a portfolio of $100,000, and you distributed as follows:

  • Aggressive tech stocks — 50% ($50,000).
  • Blue-chip stocks — 20% ($20,000).
  • Foreign stocks — 20% ($20,000).
  • Gold bullion — 5% ($5,000).
  • Commodities — 5% ($5,000).

Now keep in mind, I’m not saying this is how you need to distribute your portfolio. I’m just using nice, round numbers to keep the math easy. You should really check out The Bauman Letter for tips on how to balance your investments.

But let’s assume that you’ve had a great year of stock picking and your tech stock positions are up 65%, your blue-chip stocks are up 20%, gold is up 12% and commodities are up 7%. Foreign stocks struggled a bit for you and are flat.

That means your portfolio is now worth $137,450.

  • Aggressive tech stocks — $82,500, or 60% of your portfolio.
  • Blue-chip stocks — $24,000, or 17.5% of your portfolio.
  • Foreign stocks — $20,000, or 14.6% of your portfolio.
  • Gold bullion — $5,600, or 4.1% of your portfolio.
  • Commodities — $5,350, or 3.9% of your portfolio.

As you can see, by just being a great stock picker and riding the rally in the various sectors, your portfolio has shifted over the past year to favor aggressive tech stocks more than you had intended. What’s more, your exposure in safe haven areas such as blue-chip stocks and gold have shrunk significantly. That could put your portfolio in dangerous territory should the market collapse in 2018 with tech stocks once again leading the way lower.

A Time to Explore New Investments

The end of the year is a great time to step back and examine your investment portfolio. If you’ve enjoyed some stellar gains this year, then you might need to take some money off the table and move it to other investments so that you remain protected against an unexpected turn in the market.

Rebalancing your portfolio keeps you in the game longer. It also gives you a chance to explore new investment avenues that maybe you didn’t have the capital to invest in a year or two ago.

Is it time to potentially move some of your funds out of stocks and into rare tangible assetssuch as stamps, art or rare coins?

Is it time to look in to real estate as a way to protect and grow your wealth?

Or maybe you need to add more income to your portfolio? Matt Badiali has just released a special report that offers an easy way to add a steady flow of income to your portfolio without using options. (You can check out his special report here.)

As we head into the final month of 2017, closely examine your portfolio. Take the time to rebalance. Don’t let it run wild. Prune it back in the right places and reap the benefits year after year.


Using this investment strategy could mean the difference between surviving the next stock market collapse and losing everything. Here's how to do it.

Jocelynn Smith

Sr. Managing Editor, Sovereign Investor Daily

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Source: Banyan Hill 

Here’s Where to Invest in The Promise of Quantum Computers

Nothing has changed the world more than technology, or to be more specific, the ability to compute. Computers today are helping you in nearly every facet of your personal and business lives. And everyone else too – a large portion of the world’s population now carries a computer in their pockets (smartphones).

All of this has been possible because of the capability to manufacture billions of silicon computer chips every year. Each one of these of these chips is composed of billions of transistors, the basic building blocks of a computer. Today, these transistors are mere dozens of atoms across.

Technological progress has moved steadily forward because of our ability to shrink the size of transistors regularly. That trend is known as Moore’s Law – which at its core says, that every two years, the number of transistors we can cram into a computer chip will double, and it has for decades now.

But guess what? Scientists agree that Moore’s Law is now kaput. It is believed the number of transistors we can cram into a computer chip is slowing and will likely reach its limit at about seven nanometers circa 2020. That view was backed earlier this year by the CEO of Nvidia (Nasdaq: NVDA), Jensen Huang.

Quantum Computers

So what happens then? What’s next?

I found the answer to those questions in the course of my research for the Singularity project. It is a technology so advanced that even Microsoft founder Bill Gates says he doesn’t understand it. And he’s a pretty bright guy.

The technology in question is the coming next age in computing… quantum computers.

The physics behind this is extremely complex, thus stumping Bill Gates even with his knowledge of physics and math. My physics background helps, but I’m no expert on quantum mechanics… so here is the simplest explanation for you I can come up with…

Current conventional computers represent each ‘bit’ of information – the logical zero or one – in the on/off state of a transistor. However, by exercising control over sub-atomic particles known as Majorana fermions, quantum computers will instead work with “qubits”. Unlike a standard bit, a qubit can adopt a uniquely quantum superposition of the two logical states. However, quantum states exist for only a short period of time (a process called coherence). In other words, quibits revert extremely quickly back to a classical computing stage – zeros and ones.

One interesting aspect is that, because of the basic properties of quantum mechanics, a quantum computer will be more prone to errors than a conventional supercomputer. In a Financial Times article, Jeremy O’Brien of the University of Bristol’s Center for Quantum Photonics estimated that to create a quantum computer with 100 ‘logical qubits’, a system with about a million actual quibits would be needed.

Once quantum computers reach the 50 quibits level, they will be superior to every existing conventional computer in existence. And when that happens, quantum computers will be exponentially faster than current computers. And even more importantly, quantum computers will able to solve problems beyond the capabilities of our current machines. Tasks such as designing complex molecules – new drugs or advanced materials – will then be within reach.

The Battle for Quantum Computing Hardware Supremacy 

In his recently published book, Microsoft CEO Satya Nadella called the battle over quantum computing an “arms race” as important as AI (artificial intelligence) that has “gone largely unnoticed”. Although not by Microsoft – it began development in the field more than a decade ago.

However, the technology behind quantum computing is now moving out of the science discovery stage and into the engineering phase. As with the very early days of semiconductors, what now is needed is to find ways to scale up a technology that scientists have proven does work.

Ironic that Nadella would that ‘arms race’ term. Because China is racing to beat the U.S. in this new technology and some say it is making great progress toward a 40-qubit machine.

Luckily, a number of the top U.S. technology companies are working hard on scaling up quantum computing technology. The companies involved in this ‘arms race’ include as I mentioned Microsoft (Nasdaq: MSFT) as well asAlphabet (Nasdaq: GOOG) and IBM (NYSE: IBM).  

Google plans to use a 50-qubit machine later this year as a demonstration of its problem-solving power.

IBM has been offering since last year quantum computing as a cloud service with a 5-qubit computer. Just a week ago, IBM announced it is releasing 20-qubit quantum computers – its first truly commercial offering.

You can see clearly here that the engineering scale-up of quantum computer technology has begun. The problem remains though as to how to keep the errors down. That’s because the more qubits there are, the more complex their interactions (a process appropriately named by scientists as entanglements) are.

IBM has also made progress on the aforementioned time problem. Its machines last year had coherence times of only around 50 nanoseconds. This year, its quantum machines are in the 90 microsecond range. Again, quite a leap forward.

And for Quantum Software and Chips

You may be wondering – so where does Microsoft fit in since it is not really a hardware company like IBM? Think about it – of what use will quantum computers be without software to run on them?

So beginning late this year, its Visual Studio, which is used to writing programs that run on Windows, will include tools to produce software that can run on its quantum machines as well. Through its Azure cloud service, developers will have access to simulations with machines of up to 40 quibits.

With the long time Microsoft has been preparing for the quantum computing age, I would not be surprised to see it dominate the next age of computing software as it did the prior age with Windows.

And despite the high-powered physics behind quantum computers, there will still need to be semiconductor chips to power them. For example, IBM has a quantum computing chip made from metals that become superconducting when cooled to extremely low temperatures. Its chip operates at a temperature a fraction of a degree above absolute zero.

Several types of controlled systems can be used to create qubits – superconducting circuits, trapped ions, and even single particles of light – photons.

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Source: Investors Alley 

3 High Growth REITs For Profits in an Amazon World

The Thanksgiving weekend marks the official start to the Christmas buying season. There is Black Friday on the day after and now Cyber Monday on the following Monday. The Black Friday to Cyber Monday weekend is one of the biggest shopping events of the year and each year online sales take a larger portion of the take. According to Forbes in 2016, online sales for the weekend increased by 16.4%. Also, according to a Forbes article, this year total retail Thanksgiving weekend sales are forecast to increase by 47% with online sales grabbing a 40% share.

The point to remember is that when a shopper buys something online, the Internet does not magically delivery it to the buyer’s home. There is an extensive infrastructure network that makes sure an online sale is filled and delivered. There is a chain of types of commercial real estate involved from the time an online order to buy is placed until that item is delivered to the buyer.

If you are like me, you might have trouble with buying shares of, Inc. (Nasdaq: AMZN), which trades at a P/E of near 300 and the company’s business model seems focused on how low they can cut profit margins to steal no-profit sales from other retailers.

An alternative way to invest and profit from Amazon and the growth in online sales is to own shares of the real estate investment trusts (REITs) that provide the warehouse space needed to fill and deliver online orders. These REITs can grow right along with the growth in online sales regardless of who is doing the selling. The difference is they can do it profitably, pay attractive dividends to investors and grow those dividends over time. Here are three REITs that directly benefit from the growth in online retail sales.

Equinix, Inc. (Nasdaq: EQIX) owns and leases spaces in the datacenter properties it owns. The company has a global footprint with 180 data centers located on every populated continent. Equinix converted to REIT status in late 2014 and started paying dividends for the first quarter of 2015.

Growth is derived from the need for more Internet communications and data computing power. This is directly tied to the growth in online retail sales. Free cash flow reported as funds from operations (FFO) and the dividend are expected to grow at a low teens rate.

Data center and growth focused REIT expert Bill Stoller rates EQIX as his highest conviction REIT for 2018. The stock currently yields 1.7%.

Related: 5 REITs Raising Dividends in December

Monmouth Real Estate Investment Corp (NYSE: MNR) is an industrial property REIT that owns 108 warehouse and logistics properties. Monmouth is unique in that 54.5% of its revenue comes from lease contracts with leases from FedEx Ground, FedEx Express, and FedEx Supply Chain Services. To be blunter, Monmouth Real Estate is a significant landlord for FedEx. FedEx has evolved into a dominant logistics company including delivery of online sales purchases. Monmouth’s industrial properties are “mission critical” for the processing and delivery of online retail sales. The company recently boosted its quarterly dividend by 6.25%. The stock yields 3.9%.

With a $35 billion market cap, Prologis Inc (NYSE: PLD) is the largest industrial REIT. The company is the world’s leading owner, operator and developer of logistics real estate. It is likely that almost every product sold by online retailers passes once or more through a Prologis owned property.

The company forecasts a 162% projected growth of e-commerce sales from 2015-2020. Company presentations point out that e-commerce business requires approximately three times the warehouse floor space compared to brick and mortar retailers. Online sales do not have stores, but they still require a lot of commercial real estate space to operate their businesses. The difference is that space is in industrial warehouses instead of stores.

For Prologis, the growth in e-commerce and the other logistics businesses it supports with allow the company to growth profits, FFO and dividends at a low mid-teens growth rate. The stock yields 2.6%.

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Source: Investors Alley 

3 Buy Signals for This Hated Sector

It seems like investors were writing off the real estate sector entirely.

With the rise of technology used to shop online, work from home and even go to school, real estate has been a hated sector.

But it’s a sector I have been a fan of this year, triggering gains of 15% and 17% in my Pure Income service.

That’s because even though I know the landscape for real estate is changing, I still see the crowds at the malls, the wait times at restaurants and the continued need for hospitals and health care facilities.

So the decline in values recently has looked like an opportunity to me.

But my personal experience or viewpoint doesn’t have anything to do with my recommendation today.

 Instead, three separate computer-based buy signals are flashing bullish signals on the real estate sector, and I have a possible triple-digit opportunity for you.


Let me explain.

Three Buy Signals for the Real Estate Sector

Let’s start with the three buy signals on the sector before I give you the opportunity.

The first is the most basic, a price chart of the SPDR Real Estate Select Sector ETF (NYSE: XLRE).

Three separate computer-based buy signals are flashing bullish signals on the hated real estate sector, and I have a possible triple-digit opportunity.

This is showing a possible breakout of a long trend channel.

It may have just had a false breakout, since the price jumped above the trendline, then fell back below it. But this can also hold as a new, steeper uptrend for the exchange-traded fund (ETF). As long as it can hold above its previous peak, around $33.50, prices should continue to climb.

The second is a seasonality chart.

Three separate computer-based buy signals are flashing bullish signals on the hated real estate sector, and I have a possible triple-digit opportunity.

Right now, it is a great time to enter the real estate sector based on a 10-year seasonal analysis of the Vanguard REIT ETF (NYSE: VNQ). I used this ETF because it has data going farther back that the newly listed XLRE in the price chart.

December is clearly the strongest month to be in real estate, and we just bought a real estate investment trust (REIT) in my seasonal service, Automatic Profits Alert, a couple of weeks ago that is already benefiting from this trend.

The third chart is something you may not be too familiar with, but it is a concept I have discussed before called a Relative Rotation Graph™.

If you want to learn more about the concept, you can click here to read more about it.

Basically, it’s the idea that stocks rotate in and out of leading and lagging the market. And there are key turning points, where a sector will shift from lagging, to improving and eventually leading the market.

The real estate sector is at such a point. Take a look:

Three separate computer-based buy signals are flashing bullish signals on the hated real estate sector, and I have a possible triple-digit opportunity.

If you can read the text, you’ll notice it is in the lagging section of the chart. But when an ETF is in that section and turns sharply higher, like XLRE did, that is a sign momentum is shifting and the sector is turning around — which is the exact time we want to jump in.

A Unique Way to Profit

All told, the real estate sector is a solid buy right now.

In my service, I handpick certain stocks to benefit from these trends. For today, I’m going to recommend a unique way to profit, and that’s to buy a call option on the XLRE real estate ETF.

The option we are going to buy is the February 16, 2018, $34 call option.

With this option, we are expecting the ETF to rise as predicted by the three charts above. However, whenever you buy an option, it’s important to remember you can lose everything you paid to buy the option. Even though we have three buy signals, there’s always a chance the trade doesn’t work out, so just keep that in mind.

This option costs roughly $0.55, depending on when you purchase it. Since one contract covers 100 shares, one contract will cost about $55.

Now, I want to highlight that this is not a position that I will be tracking or updating you on, so it will be up to you to pull the trigger to take profits or cut losses.

A good rule of thumb for a trade like this is to sell half of your position at a 50% gain, and manage the second half to either take profits if it begins to fall by about 30% in value, or start to sell the second half once it is above 100%.

For a loss, you can cut it if it falls to a 50% loss.

For the ETF, all we need is it to rise about 4.2% over the next three months to hand us a 100% gain.


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Source: Banyan Hill 

Five 10% Yields Under $10

Everybody likes a sale, but there’s a significant difference between something that’s a value, and something that’s merely cheap – a good value can last you years and even decades, where something cheap can leave you in the lurch within a few months.

The same can be said for several enticing double-digit yields right now. I’m about to introduce you to five 10%-yielding dividend stocks, all of which boast low prices in the single digits. But that doesn’t make them all good deals.

Far from it.

We all know that nominal share price typically doesn’t mean much – what makes a stock “cheap” is its price compared to metrics such as earnings, sales, free cash flow and other operational measures. But at a certain (low) point, price does start to play a factor in how a stock is viewed.

Many institutional investors – including mutual funds and ETFs – draw a line in the sand at $10 per share, refusing to buy any stock that trades in single digits.

That’s important because institutional buyers can create something of a floor for a stock, which means once a stock falls below $10, it can start to lose that market prop. The same can be said for the $5 mark, below which other institutional investors will refuse to buy.

In other words, stocks under $10 aren’t necessarily flawed because they’re so cheap – and in fact, some of them are excellent value candidates just waiting to bounce back. But single-digit stocks tend to reflect companies at some level of distress, and a lack of institutional interest doesn’t help their cases.

That’s why investors delving in any uber-cheap stocks must be diligent in assessing everything – all the warts – before buying. That goes doubly for stocks with dividends of north of 10%, as low share prices combined with sky-high yields can be a sign of a troubled stock.

Here’s a look at five such stocks that all look alluring thanks to low prices and elevated payouts … but some of which are disasters in the making.

CBL & Associates Properties
Price: ~$5.80
Dividend Yield: 13.9%

Back in October, I warned against CBL & Associates (CBL) – a real estate investment trust that invests in malls, as well as “community centers” that involve retail, yes, but also dining and entertainment. The company is in the midst of trying to redefine itself, and this year’s results haven’t exactly been promising. I mentioned at the time that while the dividend was covered by adjusted funds from operations, the payout has stalled, AFFO was slipping and portfolio occupancy was on the decline.

Well, things have gone bad to worse.

CBL cut its dividend from $1.06 annually to just 80 cents – the only reason CBL’s yield is higher now than it was then is because Wall Street has given the stock a 30% haircut since then. AFFO was off 12.3% in the third quarter, to 50 cents per share, and the company’s net income is now off about 27% year-to-date. Portfolio occupancy at least ticked higher sequentially, by 150 basis points to 93.1%, but that’s still off from the year-ago quarter.

CEO Stephen Lebovitz said that “revenues were impacted by additional bankruptcies, store closures and rent concession,” which is the wider story in retail real estate right now. While CBL’s dividend cut helps the company save cash, it still hasn’t solved the problem that is plaguing its industry. Until it does, CBL is nothing more than a yield trap.

BlackRock Capital Investment Corporation (BKCC)
Price: ~$6.70
Dividend Yield: 10.8%

BlackRock Capital Investment Corporation (BKCC) is a business development company that provides middle-market companies with various avenues of financing, including senior and junior secured debt (roughly 60% of the portfolio), subordinated/unsecured debt (16%) and other means.

BKCC’s typical investment will be anywhere between $10 million and $50 million, and it will invest across a wide array of industries – finance (26%) is the biggest slice of the pie, but it also holds companies in chemicals, energy, business services and environmental industries, among others.

BlackRock Capital shares a name and relations with investment management giant BlackRock (BLK), but that’s about it – it certainly doesn’t share its success. BKCC has been in a steady decline since 2013, including a 4% drop in 2017 amid a red-hot broader market.

Its struggles are illustrated by its third-quarter earnings, which included a 4.4% sequential drop in net asset value, as well as net investment income of just 17 cents per share – a penny shy of its quarterly distribution. That was affected by interest from outstanding convertible notes, as well as markdowns in legacy investments.

It’s part of a broader half-decade downtrend that has forced BKCC’s hand into not one but two dividend cuts, including one enacted at the beginning of this year. In fact, the last time BlackRock Capital paid out this little, it was recovering from the 2007-09 financial crisis and bear market.

With few signs of improvement to point to, BKCC’s dividend seems much more likely to stagnate or shrink than bounce back.

BlackRock Capital Investment Corporation (BKCC) Isn’t Getting Up Off the Mat

Frontier Communications (FTR)
Price: ~$7.00
Dividend Yield: 34.5%

That’s no misprint – beleaguered telecom Frontier Communications (FTR) now yields close to 35% at current prices. What’s even more comical is that its 60-cent payout represents a whopping 62% cut, delivered earlier this year.

A little fun with math: If Frontier was paying its previous $1.58 out at today’s prices, it would be yielding more than 90%!

Sadly, this entertaining dividend train wreck has to end sooner than later.

While Frontier has long been troubled, the start of the current avalanche can be traced back to 2015, when it spent $10.54 billion on wireline, broadband and other assets from Verizon (VZ) to bolster its business. Since then, however, service delays and angry customers have become the norm, and actual performance has come far shy of the growth that Frontier projected at the time of the acquisition. Meanwhile, its debt has exploded to $17.6 billion – more than five times its current equity.

Frontier cut its dividend earlier this year to preserve cash, but given the company’s operational forecasts, it’s clear that the company needs plenty to go right to continue tackle debt that’s maturing over the next couple years. Worse, it has a massive $5.26 billion in bonds coming due in 2022 that it will have to refinance – a difficult task if it’s still hemorrhaging cash to keep income investors happy.

Allianzgi Convertible & Income Fund II (NCZ)
Price: ~$6.15
Dividend Yield: 11.3%

The nice thing about the Allianzgi Convertible & Income Fund II (NCZ) is that its low price isn’t necessarily a sign of immediate danger. That’s because it’s a closed-end fund, rather than a traditional stock, and has traded at $15 or below for its entire publicly traded life. Few institutional holders are worried about its sub-$10 price tag.

The NCZ invests in both domestic convertible securities and junk debt, typically seeking to be about 50% weighted in convertibles; at the moment, it’s actually closer to about 55%. The risk from the high-yield aspect of the portfolio is meted a bit thanks to short maturities, with half its debt at one to five years, and another quarter in five to 10. And like many closed-end funds, NCZ uses leverage – about 40% right now – to help juice its income, as well as its overall performance.

NCZ has tended to benefit from a rising-rate environment, which explains its broad malaise since its 2003 IPO. The fund even lowered its distribution in 2015 to adjust to the ultra-low-rate environment. However, the fund has bounced back over the past couple years, and its generous distributions have helped its admittedly volatile performance maintain an edge over other popular bond products.

Allianz’s NCZ Throws Some Fits, But Gets the Job Done

National CineMedia (NCMI)
Price: ~$5.80
Dividend Yield: 15.2%

If you’ve been to a theater run by AMC Entertainment (AMC), Cinemark (CNK) or Regal Entertainment (RGC), among others, you know National CineMedia (NCMI) – likely through it’s “Noovie” (previously “First Look”) brand. NCMI is the company behind pre-preview previews, replete with ads and 60-second “inside looks” that essentially double as glorified advertisements. As much as we might hate it, however, these shows give advertisers access to a captive audience in front of a giant screen.

Business has been lousy in 2017, however – so much so that the company plunged in May after warning of a very difficult environment for much of this year. NCMI shares, in fact, are off 60%, helping drive the yield from a still-attractive 6.5% at the beginning of the year to more than 15% at the moment.

How safe is the yield? Well, the company stopped raising it in 2012, and the company has paid out 66 cents through three quarters of 2017, despite having collected just a dime in profits – off 44% year-over-year – during the same time span. At the same time, National CineMedia operates a low-capex, high-cash business, and from a cash perspective, the dividend isn’t in immediate danger.

And NCMI’s operational performance is disturbing – it comes amid 2017’s box office on pace to come in higher than three of the past five years. That’s because ompetition from digital video platforms are eating into the company’s business, as is an increased practice of assigned theater seating, allowing patrons to come in closer to the movie’s start time and avoiding Noovie’s content.

That’s enough to keep me away from NCMI, even at matinee prices.

Live Off Dividends Forever With This “Ultimate” Retirement Portfolio

If you want to get through retirement without ever touching your nest egg, you need more than high yields – you need high-quality yields. Losers like Frontier and National CineMedia won’t come close to cutting it. You need the “triple threat” stocks in my 8%-yielding “No Withdrawal” retirement portfolio for that.

Retirement investing can feel like a zero-sum game: You can have safe but insufficient yields from the likes of Coca-Cola or Kellogg, or you have to chase high yields in the junkyard, where underperformance eats away at those dividends. Either way, you’re dooming yourself to a lower quality of retirement than what you’ve worked so hard for.

Editor's Note: The stock market is way up – and that’s terrible news for us dividend investors. Yields haven’t been this low in decades! But there are still plenty of great opportunities to secure meaningful income if you know where to look. Brett Owens' latest report reveals how you can easily (and safely) rake in 8%+ dividends and never worry about drawing down your capital again. Click here for full details!

Source: Contrarian Outlook 

Use ICOs to Find the Next Bitcoin(s)

Picture this. If you had put a small $100 stake in bitcoin in 2010, that investment would be up a whopping 8,097% today!

Bitcoin is a cryptocurrency. (Check out this write-up on cryptocurrencies from our friends at Investment U.) Essentially, bitcoin is a digital way to store and transfer value. You can easily exchange bitcoin and other cryptocurrencies with traditional currencies all over the world.

There will only ever be 21 million bitcoins. You can’t counterfeit them because everyone in the network has a copy of all transactions, and you can prove ownership using the blockchain and cryptography.

As I write this, each bitcoin is worth around $8,100. That’s up from $.008 in mid-2010.

Bitcoin is up 1,010% over the last 12 months. Competing token Ethereum is up 3,659% over the same period and now boasts a market cap of more than $35 billion.

Many people are drawn to the “decentralized” nature of bitcoin and other cryptocurrencies – that is, the fact that they can be used like currency, but aren’t controlled by governments.

Big Bold Ideas

Some believe these “coins” will become the world’s new reserve currencies. Others are convinced that tokens like Ethereum will transform the way finance and the internet work. These are ideas with such big implications that most people have laughed them off over the years.

Yet the cryptocurrency market is on fire. The entire market’s value just surpassed $232 billion. Bitcoin accounts for around $138 billion of that total.

Thousands of bitcoin competitors have launched over the past few years.

The result is that bitcoin is no longer the only serious game in town. And more coins and tokens are launching every day.


This past summer, a startup called Brave raised $33 million in 30 seconds through an initial coin offering (ICO).

Brave’s token is called the Basic Attention Token (BAT). It aims to revolutionize the way advertising works so that it’s all powered by BAT and run on its proprietary web browser.

The company sold 1 billion coins in its $35 million offering, which sold out almost immediately. Brave will hold on to 500 million tokens to pay for further development of the network. Last I checked, BAT had risen around 600% since the ICO, and it already trades on dozens of exchanges.

Read more about Brave’s ICO here.

Getting Ahead of Itself?

This is extremely exciting stuff. It’s a new way to raise money for a new type of business. But we’re going a little too fast for my liking.

Ethereum is incredibly promising. But is it really worth $35 billion? It seems a bit much. Too fast.

And now it seems like almost every day there’s a new ICO. Most of the offerings are mediocre, while some look like downright scams.

But there is the occasional offering like Brave, which seems to have real potential.’s upcoming ICO looks promising as well.

We will be following this market closely going forward. It’s one of the most unique, profitable and potentially disruptive high-risk phenomena I’ve ever seen.

Note: The legal aspects surrounding all of this are far from clear. We don’t know how regulators will react to the boom in ICOs. But a reaction is inevitable once a few of these go horribly wrong. (There have already been a few bad events.)

Going in, you should also realize that these ICOs are not like equity crowdfunding, which is regulated and secure. Also realize that with ICOs, you’re not buying equity. You’re buying a new type of asset (a token or cryptocurrency) that powers a completely new type of business.

Do your own due diligence on all ICOs. And realize that if you’re not tech savvy, you’re going to have a tough time securing your digital assets.

Equity crowdfunding is still by far the best way to get a stake in upcoming businesses. But ICOs sure are fun to dabble in.

Here are four takeaways when it comes to ICOs…

  • ICOs are one of the most unique, profitable and potentially disruptive high-risk phenomena I’ve ever seen.
  • ICOs are not like equity crowdfunding where startups and investors have to comply with a series of regulations.
  • You’re not buying equity. You’re buying a new type of asset (a token or cryptocurrency) that powers a completely new type of business.
  • You need a system to sift through the noise. As an early adopter of cryptocurrencies, I have devised a system that avoids mediocre opportunities and scams.

Good investing,

Adam Sharp
Co-Founder, Early Investing

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