Category Archives: Technology

Bigger Than Apple

With the end of 2017 approaching, I want to take a moment to look back at the past year. Think back to the beginning of 2017 for a moment. Fresh off the November election, I think we all expected the stock market to rally.

But did you expect the Dow Jones Industrial Average to be up more than 24%?

If you did anticipate a large gain for the Dow, what component did you have pegged as the top gainer? For many readers and investors, it was likely Apple Inc. (Nasdaq: AAPL). As you can tell from the title of this article, that’s not the case.

Since tech has been hot in 2017, and was on fire heading into the year, you might have guessed Microsoft Corp. (Nasdaq: MSFT) was the top Dow performer. Or maybe with President Donald Trump’s promised rollbacks of financial banking regulations, you had JPMorgan Chase & Co. (NYSE: JPM).

None of those things came to pass, however. Apple has only gained about 49% so far this year, while Microsoft is up 37%. JPMorgan has added a mere 22% despite all the bluster back in January over reversing Obama-era banking restrictions.

No … 2017 was the year for manufacturing and capital equipment. The No. 2 biggest gainer on the Dow in 2017 was Caterpillar Inc. (NYSE: CAT), with a year-to-date return of 58%.

You may remember that I first recommended CAT stock back on June 7, and then reiterated my bullish stance on September 20. CAT stock is up 43% since June, and is still powering higher on strong global demand for construction and mining equipment.

While a 58% return is nice, the biggest gainer on the Dow is currently up more than 88% since the start of the year. This company’s shares have also come in as the 12th-biggest percentage gainers among all U.S. NYSE stocks. What’s more, those gains could extend well into 2018…

Flying the Skies with Boeing Stock

The list of investors who picked Boeing Co. (NYSE: BA) to be 2017’s biggest gainer on the Dow has to be pretty short, especially compared to the list expecting Apple to rise to the top once again. But in 2017, the Boeing stock price was a bigger gainer than Apple.

While Apple was plagued with analysts’ delivery concerns (that were only partially true) regarding its new iPhone, Boeing was raking up multibillion-dollar deals to replace aging fleets across the globe.  Boeing’s “iPhone” launch was its unveiling of the new 737 MAX 10 at the Paris Air Show back in June.

The unveiling provided considerable momentum for Boeing, and by the beginning of December, the company had net firm orders for more than 660 aircraft on the year. By comparison, Boeing brought in just 668 orders in all of 2016, and leading competitor Airbus had only booked 333 net firm orders by the end of November.

Furthermore, December is typically a huge month for aircraft orders, with Boeing finalizing more than 200 orders in the last week of 2016. In short, Boeing is not only trouncing fellow Dow component Apple, it’s also blowing past direct competition from Airbus.

As a direct result of 2017’s strong performance, Boeing recently boosted its quarterly dividend to $1.71 per share — a year-over-year increase of 20%. The company is also returning additional cash to shareholders next year by approving an $18 billion stock buyback program.

And these solid fundamentals are all without the Republican tax plan in place. With many analysts expecting some form of tax plan from Congress, Boeing is sure to benefit.

Investing in Boeing Stock

The problem with Boeing stock is that the shares are a victim of their own success. BA has ridden support at its 20- and 50-day moving averages to fresh all-time highs near $295. While this normally wouldn’t be a bad thing, especially for current BA stockholders, it has placed the shares in overbought territory.

BA’s current Relative Strength Index comes in at 75, with readings above 70 typically considered overbought. What this translates into is a short- to intermediate-term pullback for BA stock, possibly to the $275 to $280 region, which is home to support in the form of BA’s 20-day moving average. A pullback to this area would definitely make BA a buy.

 

The list of investors who picked the Boeing stock price to be 2017’s biggest gainer on the Dow has to be pretty short. But they were right...

 

Finally, Boeing will release its fourth-quarter earnings results on January 21. Boeing is expected to report a profit of $2.87 per share, up from $2.47 per share in the same quarter last year. Revenue is expected to rise 3.8% to $24.17 billion.

Boeing has had a habit of besting Wall Street’s targets this year, so another stronger-than-expected report could help BA stock blow past overhead resistance at $300.

Just remember to wait for a pullback for a better entry price before taking the plunge.

Until next time, good trading!

Joseph Hargett

Assistant Managing Editor, Banyan Hill

In this exciting NEW VIDEO, Wall Street legend and former multibillion hedge fund manager Paul Mampilly pulls back the curtain on the biggest investment opportunity in the market today. What insiders are calling “The Greatest Innovation in History,” this revolution will mint more millionaires and billions than any technology that came before it. Right now, the current market for this technology is just $235 billion, but given how fast this technology is moving experts predict it will soar to $19 trillion by 2020. But 8,000% growth is just the beginning—and now’s your chance to get in on the action. [CONTINUE TO VIDEO]

Source: Banyan Hill

Here’s How to Short Amazon

Amazon.com Inc. (Nasdaq: AMZN), the online retail giant, has seen its stock price skyrocket more than 50% over the last 12 months.

It has surged past the $1,000 price level, which was tricky to break through, and has continued to climb since then.

Many investors are looking at the euphoric Amazon stock price movement and wondering if now is a good time to short the stock.

The answer is no.

There’s never a good time to short a cult-like stock such as Amazon. It doesn’t trade on normal parameters, and it operates a business model that doesn’t have to generate a profitfor its stock to go up. These types of companies are almost impossible to short because of that.

But there is another way to profit, one I have shared with you in the past: not buying into the hype of the Amazon stock price.

Here’s what I mean…

 Grocery Stocks Got Slammed

Back in June, Amazon announced it would acquire Whole Foods to disrupt the grocery sector. Many investors bought the hype and immediately downgraded all sorts of grocery-related stocks expecting Amazon’s competition to weigh on the industry.

Then, in late August, Amazon completed the acquisition ahead of schedule.

Once again, grocery stocks got slammed.

I wrote an article on September 4 saying this bloodbath was your buying opportunity, and it paid off with an average gain of 15% since then on the five stocks I listed.

And out of the five stocks mentioned, The Kroger Co. (NYSE: KR)Sprouts Farmers Market Inc. (Nasdaq: SFM)Wal-Mart Stores Inc. (NYSE: WMT)Costco Wholesale Corp. (Nasdaq: COST) and SuperValu Inc. (NYSE: SVU), all but one has rallied basically 20% since then.

The one stock that is down is SuperValu, and even that stock popped 10% early on. Take a look:

The Amazon stock price has skyrocketed over 50% the last 12 months. But don't short the stock. Use this trading strategy instead.

Not a bad return considering Amazon was expected to crush the competition in the sector.

For reference, the S&P 500 is up about half of that amount over the same time period.

If you have seen gains like this in these stocks, and your sole purpose of owning them was to benefit from the rebound, then you can take profits off the table now.

Opportunities that come from buying into industries that Amazon attempts to disrupt occur often.

Just this year it has happened with delivery companies, pharmacy companies, grocery stocks and, last week, a new industry — dental stocks.

Overreactions to the Amazon Stock Price

Last Wednesday, dental supply stocks Henry Schein Inc. (Nasdaq: HSIC) and Patterson Cos. Inc. (Nasdaq: PDCO) closed down more than 4%.

The reason? Amazon.

Amazon is reported to now be buying dental products from a different direct manufacturer, Dentsply Sirona Inc. (Nasdaq: XRAY) — its shares were unchanged on the news.

A Henry Schein spokesperson said the company is “unaware of any market-leading dental manufacturer” having a direct relationship with Amazon, adding: “We believe that at this time Amazon is a minor player in the dental consumables market, with an insignificant market penetration.”

This doesn’t sound like a major threat to the way things are done, and it’s why buying these dental stocks on this weakness is an opportunity.

I wrote back in October about Amazon’s many failed attempts to disrupt industries. It’s what makes Amazon Amazon. But it’s also why these overreactions are buying opportunities.

Regards,

Chad Shoop, CMT

Editor, Automatic Profits Alert

In this exciting NEW VIDEO, Wall Street legend and former multibillion hedge fund manager Paul Mampilly pulls back the curtain on the biggest investment opportunity in the market today. What insiders are calling “The Greatest Innovation in History,” this revolution will mint more millionaires and billions than any technology that came before it. Right now, the current market for this technology is just $235 billion, but given how fast this technology is moving experts predict it will soar to $19 trillion by 2020. But 8,000% growth is just the beginning—and now’s your chance to get in on the action. [CONTINUE TO VIDEO]

Source: Banyan Hill 

A Big Volatility Trade To End The Year

2017 isn’t exactly going out with a bang – but it’s also not ending with a whimper either.  We’re actually seeing higher levels of volatility than what we’ve experienced most of the year.  Granted, volatility (as measured by the VIX) has been historically low in recent months.  However, the end of the year so far is proving to be a bit more interesting.

First off, we’re seeing a fairly substantial rotation out of tech stocks and into financials and other sectors.  Tech stocks have been driving the market this year and valuations have definitely gotten a bit frothy.  Moreover, financials should see benefits from higher interest rates coming in 2018 and beyond.

Tech has been hit pretty hard – especially the chip stocks – and this may have caught some investors off guard.  Surprising investors is certainly one way to get volatility to go higher.  The Semiconductor Index chart below makes this pretty clear.

Of course, there are several other factors contributing to relatively higher VIX levels, most of them political in nature.  The tax reform bill has been front and center in terms of financial news.  Who knows what the final version of the bill will end up looking like, but it seems pretty certain it will be a boon for corporations.  Any serious issues with the bill (eventually) passing could certainly add to market volatility.

There’s also the threat of government shutdown, although by the time you read this, I predict a short-term deal will already be in place.

Finally, there’s the Mueller investigation regarding the current administration and Russian interference with the election.  This case seems to have some legs to it, although the impact on the stock market remains nebulous at best.  Even if high ranking members of the administration are forced to resign, it really shouldn’t change much in terms of economics.  Once again, I expect a business-favorable tax plan to pass regardless.

SEE ALSO: This “21st Century Pension Plan” Pays You Income for LIFE

Keep in mind, political news tends to create short-term volatility.  Long-term changes in volatility are mostly the result of economics.  A political scandal is generally a short-term situation.  A tax bill is long-term.

That being said, plenty of big VIX trades are hitting the wire – and the majority of them are focused on the VIX moving higher.  Of course the VIX is the main instrument used for hedging, so it stands to reason that most big trades in VIX options would be on the long side.  Nevertheless, you can tell a lot of what hedgers are thinking about risk levels by what strikes they use.

For instance, a sizeable trader recently purchased 50,000 January VIX 20 calls for $0.50. That’s a $2.5 million bet that the VIX breaks above $20.50 by mid-January.  Of course for that kind of money, this is clearly a hedge.  The VIX hasn’t been above 20 in over a year – and hasn’t even been particularly close this year.

As someone who is generally a seller of volatility, I don’t like spending a lot of money going long VIX whether it’s a hedge or a speculative bet.  As such, I’d prefer to do a long call spread rather than buying calls straight up.  As an example, if you think the VIX is going to move higher or want to hedge, you could buy the January 13-18 call spread (buying the 13, selling the 18) for about $0.80.

It’s a good way to keep your costs low while also providing decent upside potential.  A max loss of $0.80 with a max gain of $4.20 (if VIX is at $18 or above by January expiration) is certainly a good ratio to have on a call spread.

  [FREE REPORT] Options Income Blueprint: 3 Proven Strategies to Earn More Cash Today Discover how to grab $577 to $2,175 every 7 days even if you have a small brokerage account or little experience... And it's as simple as using these 3 proven trading strategies for earning extra cash. They’re revealed in my new ebook, Options Income Blueprint: 3 Proven Strategies to Earn Extra Cash Today. You can get it right now absolutely FREE. Click here right now for your free copy and to start pulling in up to $2,175 in extra income every week.

Source: Investors Alley 

Use Dip To Buy Red-Hot Take-Two Interactive Software Inc

As the tech sector has slid recently, red-hot Take-Two Interactive Software Inc (NASDAQ:TTWO) stock has been punished.

TTWO stock has fallen from a near $120 high to just over $100 in a few days. That is a pretty big sell-off that wiped out essentially all of the stock’s gains from the prior 2 months.

Alongside the rest of the tech sector, TTWO stock is rebounding some. TTWO stock now trades near $108. But it’s still far from its recent $120 highs.

Does that mean that this rebound in TTWO stock will continue? I think so. Here’s why.

Tech Is In Rebound Mode

Tech names were beaten up last week and early this week as a rotational trade gripped the markets. With tax reform, strong retail earnings, and positive Black Friday numbers in focus, investors ditched the hyper-growth tech beauties which have led the market for so long in favor of more traditional value investments.

In other words, TTWO stock sold off in dramatic fashion without anything being wrong with the fundamental growth narrative. Same with other hyper-growth tech names.

But these growth narratives are really, really strong. After all, there is a reason many of these hyper-growth stocks have continued to roar higher for so long. At most of these companies, growth simply isn’t slowing, nor is it showing any signs of slowing any time soon.

Consequently, I’ve been buying this big dip in tech, including gobbling up Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL), Amazon.com, Inc. (NASDAQ:AMZN), Facebook Inc (NASDAQ:FB), Alibaba Group Holding Ltd (NYSE:BABA), and Netflix, Inc. (NASDAQ:NFLX), among others.

Add TTWO stock to that list.

TTWO Stock Is In Rebound Mode

TTWO stock has long been one of my favorites in the tech sector.

Towards the end of May, I said TTWO stock was a buy based on its robust, unparalleled content portfolio in the video game industry. That portfolio, which includes names like Grand Theft AutoRed DeadNBA 2KWWE 2K, and Civilization, sets the company up to succeed in a long-term window.

That buy thesis remains largely unchanged today. A strong content portfolio isn’t a near-term tailwind: It’s a long-term tailwind. TTWO can continue to pump out GTARed Dead, and NBA 2K sequels into perpetuity and, as long as each iteration offers some unique value prop, demand won’t lessen.

Don’t believe me? Just look at the data.

The first game in the Grand Theft Auto series was released in 1997. Twenty years later,  Grand Theft Auto V is the best-selling video of all-time, both in terms of revenue and units sold.

The first NBA 2K  game was released in 1999 (published by Sega.) Eighteen years later, NBA 2K17  is Take-Two’s highest-selling sports title ever, while NBA 2K18 is expected to perform even better than NBA 2K17. 

Fans simply don’t bore of these titles. Demand remains robust for every sequel.

TTWO Stock Valuation

Consequently, TTWO is a buy and hold so long as the valuation remains reasonable.

Today, the valuation on TTWO stock is very reasonable. TTWO stock is expected to grow earnings around 22% per year over the next two years, but the stock only trades at 34.8x this year’s earnings estimate. That means TTWO stock is trading at a mere 60% premium to its growth prospects.

The S&P 500, meanwhile, trades at a 100% premium to its growth prospects (20x this year’s earnings for about 10% growth).

Clearly, the recent dip in TTWO has plunged the stock into materially undervalued territory.

Bottom Line on TTWO Stock

Hyper-growth tech names will rebound from this recent sell-off. This is a “buy the dip” opportunity in many different stocks.

One stock that looks particularly attractive here is TTWO, given its robust growth narrative and cheap valuation.

I continue to believe TTWO stock is a hold into 2019, which is expected to be a banner year for the company with multiple big game launches.

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

This Is Tesla’s Real Business (It Isn’t Sports Cars)

I have a proposal for Tesla CEO Elon Musk.

Sell, or spin off, Tesla’s money-losing automotive operations (as sleek, shiny and eye-popping as those vehicles are)…

Instead, focus the future of Tesla where the real profit and growth bonanza is for the next decade:

Energy storage.

I know, I know. Sounds boring. Basically, we’re talking about hundreds of phone booth-sized boxes of lithium-ion batteries all lined up in neat rows, and wired up to the power grid.

But it’s revolutionary.

And proving just how revolutionary it is, Musk’s company basically solved Australia’s budding energy crisis in about 100 days.

 Australia’s Power Problem

As I noted months ago (“The Next Big Thing: Lightning in a Bottle”), summertime power blackouts pop up with regularity in the Land Down Under…

  • South Australia: The state’s entire population of 1.7 million residents lost all power for hours on September 28, last year.

 

  • Sydney: Its 5 million residents faced three days’ worth of rolling blackouts in February.

 

  • Victoria and New South Wales: These states, with a combined population of more than 12 million — including Melbourne, the nation’s second-largest city — nearly went dark as well.

The problem?

Literally too much dependence on a good thing — wind and solar power (which now provide around 40% of the nation’s power).

And — thanks to utility regulators’ overly aggressive mothballing of coal-fired power plants — it also left power companies with no way to fill the gap on days of peak demand when everyone has their air-conditioners cranked to the max.

Enter Musk and Tesla. In roughly 100 days’ time, the company deployed 129 megawatts’ worth of its utility-scale Powerpack battery storage units.

Last week, it brought the installation online and tied it into South Australia’s power grid.

Problem solved.

Tesla & Big Batteries

According to a new report from Bloomberg New Energy Finance (BNEF), the global energy storage market is set to rise by an exponential amount, basically “doubling six times over” between now and 2030.

By the way, experts measure electricity storage in terms of gigawatt-hours — a measurement of the output of large power stations.

To give you a sense of what “doubling six times over” means … according to BNEF, the amount of storage in the world in 2016 equaled something less than 5 gigawatt-hours, rising 60-fold to 300 gigawatt-hours by 2030.

We’ll also see a similar trajectory in prices to what’s already come before in wind and solar (and computer chips for that matter). BNEF estimates the cost of these “big battery systems” will drop by more than half (after dropping by 60% already since 2010).

The reason?

Tesla isn’t the only company ramping up battery production with a so-called “gigafactory.” As I’ve noted in recent months, Daimler is building a new $500 million battery plant in Germany. There’s a $3 billion factory being built in Thailand. Others are in the works for upstate New York, Australia, China and elsewhere.

The Future of Tesla

I already have a promising, under-the-radar energy storage stock in the Total Wealth Insider portfolio (and — unlike Tesla — this company is profitable and paying down its long-term debt). You can see why the growth trend for energy storage will be phenomenal for early entrants in this fledgling industry.

That might especially be the case for the future of Tesla. Carmaking is a boom-and-bust business.

Automotive styles change over time. Factories have to be retooled. Hundreds of components need to be built and brought together at the right place and at the right time to build a vehicle.

It all takes lots and lots of constant reinvestment.

Compare that to the energy storage business, where the same basic product can be sold over and over and over again to a legion of power companies all over the world — a $1.4 trillion marketplace.

If Tesla ever figured out that its real business is in storage instead of sports cars … look out.

Regards,

Jeff L. Yastine

Editor, Total Wealth Insider

Right now, an untapped ocean of energy—found underneath all 50 states—is about to transform the world’s energy industry. In fact, there’s enough of this energy in the first six miles of the earth’s crust to power the United States for the next 30,000 years. Wanna know this untapped energy source? Learn NOW! And as companies rush to extract this energy from the ground, they’ll need the help of one Midwestern company’s technology to make use of it. This is your chance to take advantage of John D. Rockefeller-type fortunes. Early Bird Gets The Worm...

Source: Banyan Hill

The Easy Way to Boost Your Income

Income is not dead.

I know that the Federal Reserve has worked hard to convince Americans that income is dead with near-zero interest rates for years and the excruciatingly slow crawl higher from zero.

Not only is income not dead, but it should continue to be a critical part of your overall portfolio along with domestic and foreign stocks, gold, commodities and even rare tangible assets.

That’s why I want to show you an easy way to boost your income in your portfolio that doesn’t require the use of options and is as easy as buying a stock…

An Easy Way to Boost Your Income

Earlier this week, I talked about the importance of rebalancing your portfolio at least once a year following sharp movements in the market. And we’ve certainly had that.

The Dow Jones Industrial Average has gained more than 20% this year. It broke through yet another record level as it surged past 24,000 this week.

The tech-heavy 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 while high-flying stocks can produce some solid growth for your wealth, it’s important to dedicate a portion of your portfolio to income.

And while Janet Yellen and the rest of the Federal Reserve have lifted rates several times — and are likely to do it once again later this month — we’re still far off from interest rates that are regarded as normal.

Yet, there is still an easy way to boost your income.

A Hidden Income Gem

A steady flow of income is something that most of us are searching for when it comes to growing our portfolio, particularly as you get closer to or enter retirement.

The stocks of the S&P 500 Index aren’t exactly wowing investors, as it returns on average a 1.93% dividend yield.

Fixed income is still struggling under low interest rates managed by the Federal Reserve. The U.S. 10-year note is yielding just 2.34%.

Utilities have long been a go-to for many investors with their long history of dividend payments. But even utilities are averaging a yield of only 3.31%.

But Matt Badiali, editor of Real Wealth Strategist, has uncovered an amazing collection of stocks within the natural resources sector that issue a steady stream of income to shareholders.

In fact, he’s selected five stocks for his Real Wealth Strategist subscribers that average an annual yield of more than 7.4%. And these five stocks will pay out in the form of 44 checks over a year.

Matt calls them freedom checks.

I want to show you a great avenue for adding income to your portfolio. This is the easy way to boost your income. As it turns out, income is out there.

Of course, Matt didn’t choose these stocks just because they have a high yield. He’s also expecting to see their share value grow over time due to strength of the company and growing demand in the industry.

Achieving Portfolio Balance

Achieving the right balance for your portfolio is more than just loading it up with a bunch of high-flying stocks and the occasional blue chip.

The right balance means that you are not only growing your wealth, but protecting it against fluctuations within the market. It’s rare when all sectors are rising at the same time and at the same rate. It’s also rare for all sectors and investment types to fall at the same time and rate.

With the right balance, you are able to cushion any losses that you might experience in one group or sector with gains in another. And by adding a nice mix of natural resources and income to your portfolio, you’ll be one step closer to getting that mix.

Regards,

Jocelynn Smith

Sr. Managing Editor, Banyan Hill

In this exciting NEW VIDEO, Wall Street legend and former multibillion hedge fund manager Paul Mampilly pulls back the curtain on the biggest investment opportunity in the market today. What insiders are calling “The Greatest Innovation in History,” this revolution will mint more millionaires and billions than any technology that came before it. Right now, the current market for this technology is just $235 billion, but given how fast this technology is moving experts predict it will soar to $19 trillion by 2020. But 8,000% growth is just the beginning—and now’s your chance to get in on the action. [CONTINUE TO VIDEO]

Source: Banyan Hill

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.

Buffett just went all-in on THIS new asset. Will you?
Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.

Source: Investors Alley

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.

Buffett just went all-in on THIS new asset. Will you?
Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.

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.

Regards,

Chad Shoop, CMT

In this exciting NEW VIDEO, Wall Street legend and former multibillion hedge fund manager Paul Mampilly pulls back the curtain on the biggest investment opportunity in the market today. What insiders are calling “The Greatest Innovation in History,” this revolution will mint more millionaires and billions than any technology that came before it. Right now, the current market for this technology is just $235 billion, but given how fast this technology is moving experts predict it will soar to $19 trillion by 2020. But 8,000% growth is just the beginning—and now’s your chance to get in on the action. [CONTINUE TO VIDEO]

Source: Banyan Hill 

Find Triple Digit Returns from Your Kid’s Video Games

This digital age in which we live is literally changing everything. . .including when it comes to sports. Forget physical smashmouth sports like football and hockey. This new generation of sports fan wants to see lots of action – but only on a digital screen.

Welcome the world of e-sports, which unlike most sports, originated in Asia. The love of such activities extended to the stock market as Monday saw a red-hot IPO in Hong Kong, called Razer, debut. The company is the “arms merchant” for serious gamers making mice, headsets and notebooks.

And I do mean serious gamers. There are tournaments where there is a $10+ million top prize.

It’s hard for someone not a teenager or in their 20s, like myself and maybe you, to understand the attraction of e-sports. But one thing I do understand – it is already a huge business and growing rapidly.

e-Sports Business

I want you to think for a moment about its potential. In sheer numbers, video gaming is a market that is bigger than China and larger than the number of Facebook users (over one billion). And last year, the sport’s fans watched more than 6 billion hours of competitive gaming!

Related: 3 Tech Stocks Up More than Apple, Facebook, and Google.

According to data from the consultancy Frost & Sullivan, the global industry generated more than $100 billion in 2016! Of that figure, e-sports is still rather small, at about $892 million. A rather conservative forecast from another consultancy, PricewaterhouseCoopers, says the industry will generate $133 billion in revenues by 2021. The investment bank Macquarie forecasts that e-sports will be a $5 billion business by 2020.

I think the $5 billion number will even be exceeded by 2020. You see, there are three main areas where e-sports can produce revenues. First is direct payments from live streaming services – some live tournaments have tens of millions of viewers. Last year, there were 11.1 billion e-sports videos streamed in China and 2.7 billion in North America, where about one-third of gamers reside.

The next source of revenue is the sale of content rights to broadcasters. Finally, advertising revenues, which today come largely from the gaming industry. But it isn’t hard to imagine a whole raft of companies looking to get their message in front of millions of viewers. That new reality is already beginning to unfold, which I will show you in a moment.

e-Sports Growth

The growth of e-sports looks to just be accelerating with two Las Vegas casinos planning to build dedicated e-sports arenas.

More importantly, the backers of e-sports are being smart and adapting what works for traditional sports and applying it to e-sports. Such as creating a league and having teams in many of the major cities. The parent companies of the New England Patriots, Los Angeles Rams and the New York Mets now own franchises (at a cost $20 million) in the first attempt to create an actual league.

The teams were sold by the world’s largest publisher of video games, Activision Blizzard (Nasdaq: ATVI), which came up with the idea of a 12-team Overwatch League. Unlike traditional sports leagues, this league also has teams from London and Shanghai.

The Overwatch League is not the only e-sports league in existence. There is a similar venture from Riot Games, which is owned by Chinese tech giant Tencent (OTC: TCEHY). It is charging $10 million for franchises in the North American League of Legends Championship Series. Over 43 million people watched last year’s League of Legends World Championship online, up from just 8 million in 2012. Major venues such as Seoul, South Korea’s Olympic Stadium were sold out to watch the event.

The build-out of leagues is already attracting sponsors, as I hinted at before. Both Intel (Nasdaq: INTC) and HP (NYSE: HPQ) are lead sponsors for the Overwatch League, whose regular season starts on January 10.

Related:

e-Sports Investments

So how can you invest into this e-sports phenomena?

You’ll want to look at companies whose business is heavily e-sports related. A firm like Amazon.com (Nasdaq: AMZN), which paid about $1 billion in 2014 for Twitch – the favorite live streaming platform to watch gamers battling has many other businesses. Even with a $1 billion price tag Twitch is just too small a part of Amazon to significantly affect the company’s performance.

At the top of my buy list is the aforementioned Activision Blizzard, which also has a live streaming channel called Major League Gaming. It acquired the firm in 2016 for $46 million.

I believe its CEO, Bobby Kotick, really understands the video gaming and e-sports better than the CEOs at its rivals. He sees e-sports as becoming more broad-based in its appeal in 2018 and I agree. During the company’s latest earnings conference call, he said “We view that (e-sports) as a major growth initiative and a very sizable standalone opportunity for the company.”

The company is already enjoying the growth in the general gaming industry with $1 billion from in-game (digital games) revenues in the last quarter. It currently has eight $1 billion franchises, including the very popular Call of Duty.

Not surprising then Kotick raised the company’s guidance for the next quarter and that the stock is up nearly 75% year-to-date and almost 60% over the past year.

Next on the list is a rival of Activision, Take Two Interactive Software (Nasdaq: TTWO), which is best known for its Grand Theft Auto franchise. Its stock soared nearly 10% after its recently-released earnings report.

While trailing in the e-sports business, the company is finally moving ahead now. It inked a deal with the NBA to launch a NBA eLeague. The NBA will be the only major professional sports league to have its own e-sports league. The league will begin in May 2018 with so far 17 of the 30 NBA teams saying they will play for at least three years.

Take Two is also expanding rapidly into mobile games. It strengthened this area of the company with its acquisition of Barcelona-based Social Point for $250 million earlier this year. Social Point is one of the most prolific mobile games developers.

Again not surprisingly, Take Two management also raised guidance for its next quarter. Its stock has even outperformed Activision with a 133% gain for the year so far and it has risen 140% over the past 12 months.

See also: Buy These 3 Hot Semiconductor Stocks for Long-Term Profits

Finally, an alternative way to play the e-sports trend is through the semiconductor company, Nvidia (Nasdaq: NVDA). Its stock has soared 101% year-to-date and 144% over the past 52 weeks. As I’m sure you may know, Nvidia is a worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU.

The key to its rapid growth to date has been the video gaming industry. The company continues to steadily gain market share among gaming service providers, strengthening the company’s position in the workstation-based gaming services in supercomputing segments. That’s because its lineup of advanced graphics and gaming cards offer significantly higher functionality. That should continue to be a strong tailwind for Nvidia.

You also need to add in the company’s moves into the latest tablet computers and the automobile technology space and data centers and Nvidia continues to tell an exciting tale. Its recent alliance with China’s Baidu (Nasdaq: BIDU)on artificial intelligence (AI) technology could also be another big winner for Nvidia.

Bottom line – you may not understand video gaming or e-sports, but do realize they will continue to be big money winners in the years ahead.

Buffett just went all-in on THIS new asset. Will you?
Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.