The more I read about Qualcomm (QCOM), the more I like it. When I was reading up on the HTC smartphones today, I was pleased to see how well they did performance-wise, which is mostly due to their QCOM Snapdragon processors (admittedly, the rest of the hardware architecture, as well as the software, can influence performance too, but usually testing, if performed properly, should be able to eliminate most of the software aspect, other than the operating system).
But QCOM’s drop today, on no real news, looks good to me, so I doubled my position at $61.46, lowering my dollar cost average to $61.98.
I was reading “Samsung’s Mediocre S4 Reviews Are Bad News for Apple” over at Motley Fool, and the key takeaway wasn’t what I expected. There may be a new leader about to step up in the smartphone market, and it isn’t Samsung or Apple, or even Blackberry. It is HTC, with their new model “One”. I even did my own research, and the tech media seems to love the new HTC phone, much moreso than the Galaxy S4.
Just one problem: You can only buy HTC over-the-counter in the U.S. (symbol: HTCKF), and the OTC stock has almost no volume. If you can trade on the Taiwan exchange, it’s a great buy under symbol 2498.
Alternatively, you could buy one of HTC’s suppliers, such as Qualcomm (QCOM), who makes their processors. (I know, that was a shameless plug for one of my stocks.)
Another much lesser alternative is the etf route. But the best etf for Taiwan is the iShares MSCI Taiwan ETF (EWT), and HTC is only 1.67% of EWT’s holdings. However, if you happen to like Taiwan Semiconducter (TSM), it represents 21.25% of EWT’s holdings. Unfortunately, buying the etf is also buying Taiwan’s economy, which “only” grew by 1.5% last quarter. In addition, Taiwan’s biggest export partner is China, getting over 28% of Taiwan’s exports (source: CIA Factbook). There are a lot of factors in Taiwan, ergo a lot of factors in EWT.
Truth be told, I like Taiwan more than HTC, although EWT and Taiwan will undoubtedly benefit from any HTC success. I am adding EWT to my watchlist, because it is too high to buy now. But it could be a good buy on a pullback.
For the market to turn definitively long-term bearish, the S&P 500 would have to lose over 9%. Fortunately, that isn’t a concern…(snide sarcasm intended)
The S&P 500 levels to watch today:
UPSIDE: 1596-1597 (3 data points, including the all-time high), and 1600 (top of the Bollinger Bands). LAST CLOSE: 1593, inside the 1592-1593 (2 data points) range. DOWNSIDE: 1588-1589 (2 data points), 1585-1586 (2 data points), 1582-1583 (2 data points), 1577-1579 (4 data points), 1573-1575 (5 data points), 1570-1571 (3 data points, including March’s high and the 10 day moving average), 1569 (20 day moving average), 1568 (April 10th’s low), 1551-1565 (29 data points and the 50 day moving average), 1548 (April 22nd’s low), 1543 (April 17th’s low), 1539 (2 data points and the bottom of the Bollinger Bands), 1536 (April 18th’s low), 1530 (February’s high), 1509 (January’s high), 1501 (March’s low), 1485 (February’s low), 1474 (2012’s high), and 1457 (200 day moving average).
This is a rare week: We get the two major central banks meeting (the Fed and the European Central Bank), as well as the end of the month today. It is easy to overlook the earnings reports this week: Pfizer today (which missed on sales and cut their outlook for this year), with Merck (MRK), Visa (V), and Comcast (CMCSA) on the docket for tomorrow.
Above is a link to a good article on the state of Blackberry (BBRY) today. Here is the main thing to know:
The Q10, set to go on sale in the U.S. at the end of May, will sell through the four largest U.S. carriers for about $249 on a two-year contract. While that’s $50 more than Apple Inc (AAPL).’s iPhone 5, it’s part of a strategy to target business users willing to pay more for a phone they think will boost their productivity, according to analysts including Anil Doradla at William Blair & Co. in Chicago.
While I would rather own a Q10 than an iPhone, that is a risky strategy by BBRY. I wouldn’t pay more for a Blackberry than I would for a Samsung, LG, or Motorola smartphone. We will see if it pays off for them.
The article above uses JC Penney (JCP) as an example of income inequality, which is probably a bad choice, since JCP is in it’s death throes. Clearly, the company paid too much for their CEO, who they later fired, and now they will be lucky to survive the year.
To me, the income inequality issue isn’t about companies overpaying their CEO’s (although in some cases like JCP, they do). It is actually about companies being too big. While economy of scale works to the advantage of large businesses, it also creates a multi-layered bureaucratic monstrosity which requires a highly paid CEO to oversee it. Think about it: If a company has 10,000 employees, how much do you pay the guy at the top of that organization chart?
But the reason companies grow so big, and thrive at the larger size, is because government regulations insulate them from competition. As soon as a small “mom and pop” business grows big enough to start competing with the megacorporations, mom and pop find a whole slew of new regulations they have to deal with, which suck up more of their profits. This is why you hear company founders saying they couldn’t build their businesses in today’s regulatory atmosphere.
I am not saying all regulation is bad. What I am saying is that regulations need to be weighed for their value to society as a whole, versus how much they also tend to moat big businesses from competition (thereby creating income inequality, as well as “too big to fail” businesses).
At the very least, this qualifies as “over the top”:
Budweiser recently unveiled the “Buddy Cup,” a pint glass with a built-in chip that connects to Facebook. The cup automatically connects people on Facebook when they clink glasses with another “Buddy Cup” user, creating a virtual friendship instantly.
The cup’s promotional video shows the glass being tested in Brazil as images of drinkers enjoyably clinking pints flash across the screen.
“So, they just did the same as always: Went out drinking Bud, and making new friends,” a male narrator announces in the company’s commercial.
Personally, I think Budweiser needs a new marketing company…
Even though S&P 500 futures are up early, don’t read too much into it. With the Fed meeting Tuesday, and the European Central Bank meeting Thursday, any moves up or down will be minimal.
The S&P 500 levels to watch today:
UPSIDE: 1583 (April 24th’s high), 1585-1586 (2 data points), 1588-1589 (2 data points), 1592-1593 (2 data points), and 1597 (April 11th’s high and the all-time high and the top of the Bollinger Bands). LAST CLOSE: 1582. DOWNSIDE: 1577-1579 (4 data points), 1573-1575 (5 data points), 1570-1571 (3 data points, including March’s high), 1568 (April 10th’s low and the 20 day moving average), 1566 (10 day moving average), 1551-1565 (29 data points), 1549 (50 day moving average), 1548 (April 22nd’s low), 1543 (April 17th’s low), 1539 (2 data points and the bottom of the Bollinger Bands), 1536 (April 18th’s low), 1530 (February’s high), 1509 (January’s high), 1501 (March’s low), 1485 (February’s low), 1474 (2012’s high), and 1457 (200 day moving average).
Verizon would likely have little trouble rustling up $50 billion or more in the debt markets to help fund the full buyout of Verizon Wireless from UK partner Vodafone, bankers and analysts said on Thursday.
Two sources told Reuters that Verizon Communications is mulling a 50:50 cash and stock bid of around $100 billion for the 45 percent stake in Verizon Wireless it does not already own.
Demand for investment-grade debt is proving almost limitless in the current environment, and Verizon could expect a warm welcome from investors – even with such a large fund-raising.
While I like Verizon as a company, I would be leery of buying their stock right now. Their dividend is in danger (508% payout ratio), and a 60% debt/equity growing to 120% will not help. With a profit margin at a wafer-thin 0.98%, doubling their debt, even at a great interest rate, will not help them at all. Finally, with the stock price technically rising above the upper resistance, now is a perfect time to sell it.
Admittedly, the Motorola purchase by Google wasn’t what anyone would call a bargain, or even a good buy, thus far. However, the patent portfolio has offered Google some legal protection, even if it hasn’t become profitable on it’s own.
When I read this, I had to wonder whether the author is a complete moron:
At a time when politicians are squeezing budgets to cut borrowing, the bond market is clamoring for more debt, pushing yields on almost $20 trillion of government securities to less than 1 percent.
The average yield to maturity for the Bank of America Merrill Lynch Global Broad Market Sovereign Plus Index fell to a record-low 1.34 percent last week from 3.28 percent five years ago. Even though the amount of bonds in the index has more than doubled to $23 trillion — bigger than the gross domestic product of the U.S. and China combined — countries from Germany to Rwanda sold debt in the past month at their lowest yields.
While Harvard University economists Carmen Reinhart and Kenneth Rogoff say high debt levels slow economies, a warning political leaders from Washington to London have used to justify austerity measures, yields imply investors are giving a green light to boost borrowing. The three-decade rally in bonds shows no sign of abating as gold, the world’s traditional store of value, sinks into a bear market and inflation slows.
“Just like the beginning of last year, 2011, 2010, and 2009, people were convinced government bonds yields are going to head higher, but that hasn’t happened,” Jamie Stuttard, head of international bond management for Boston-based Fidelity Investments, which oversees $1.7 trillion, said in a telephone interview April 23. “Bond yields may stay low, as global growth rates are simply low and central banks’ policy remains accommodative.”
It took the author 4 paragraphs to just touch on the cause of the bond markets being overbought?
For all the concern that governments are taking on too much debt, there may be a shortage of bonds. Barclays Plc estimates that central banks will buy $2.5 trillion of assets considered to be safe this year as they inject cash into the global economy in an effort to stimulate growth. That’s up from $1.15 trillion of purchases in 2012 and outstrips net supply of $2 trillion, according to the London-based bank.
The global amount of the safest bonds, as measured by ratings companies, will fall to $6 trillion from $10 trillion before the financial crisis, according to an International Monetary Fund report in January. At the same time, the Dodd- Frank financial-overhaul law in the U.S. and regulations set by the Bank for International Settlements in Basel, Switzerland, require banks to hold more top-graded debt as loss reserves.
So the bond markets have a double whammy of big buyers: Central banks buying bonds, as regular banks are required to hold more bonds.
The article goes on to whine about austerity, saying governments need to spend now while inflation is low and funding is cheap. The only problem with this suggestion: What happens if the world economy improves? All the liquidity in the financial system will begin hitting the economy, creating inflation. Central banks will have to end their QE programs and begin raising rates to combat inflation. And the governments will be sitting on a ton of debt, unable to finance new debt without paying higher rates. Without austerity, governments would collapse under the burden of their own debt as soon as the world economy gets healthy.
The short-sightedness of this article’s author is incredible.
Last week, engineers sniffing around the programming code for Google Glass found hidden examples of ways that people might interact with the wearable computers without having to say a word. Among them, a user could nod to turn the glasses on or off. A single wink might tell the glasses to take a picture.
But don’t expect these gestures to be necessary for long. Soon, we might interact with our smartphones and computers simply by using our minds. In a couple of years, we could be turning on the lights at home just by thinking about it, or sending an e-mail from our smartphone without even pulling the device from our pocket. Farther into the future, your robot assistant will appear by your side with a glass of lemonade simply because it knows you are thirsty.
Researchers in Samsung’s Emerging Technology Lab are testing tablets that can be controlled by your brain, using a cap that resembles a ski hat studded with monitoring electrodes, the MIT Technology Review, the science and technology journal of the Massachusetts Institute of Technology, reported this month.
The technology, often called a brain computer interface, was conceived to enable people with paralysis and other disabilities to interact with computers or control robotic arms, all by simply thinking about such actions. Before long, these technologies could well be in consumer electronics, too.
Some crude brain-reading products already exist, letting people play easy games or move a mouse around a screen.
NeuroSky, a company based in San Jose, Calif., recently released a Bluetooth-enabled headset that can monitor slight changes in brain waves and allow people to play concentration-based games on computers and smartphones. These include a zombie-chasing game, archery and a game where you dodge bullets — all these apps use your mind as the joystick. Another company, Emotiv, sells a headset that looks like a large alien hand and can read brain waves associated with thoughts, feelings and expressions. The device can be used to play Tetris-like games or search through Flickr photos by thinking about an emotion the person is feeling — like happy, or excited — rather than searching by keywords. Muse, a lightweight, wireless headband, can engage with an app that “exercises the brain” by forcing people to concentrate on aspects of a screen, almost like taking your mind to the gym.
My portfolio was due for a correction today, and it got one: -0.62%.
On a much sadder note, it was announced that Glen Campbell has Alzheimer’s Disease. In honor of him, I offer a peak into one of the peaks of his life, a scene from his old tv show, Glen Campbell’s Goodtime Hour, featuring another legend, Johnny Cash:
Have a great weekend folks, and I will see you back here next Monday for “Fed week”.
The S&P 500 flirted with it’s highs yesterday, only to dip back down to a slightly less optimistic 1585. Today’s U.S. GDP report will have a huge impact, at least on the opening. A really bad report could take it down as far as the 1551-1567 range, where the 10 and 20 day moving averages are lurking, as well as a very strong support level. A slightly disappointing report could cause a dip down to the 1573-1575 range.
On the other hand, if the report matches expectations or exceeds them, the S&P 500 could easily take out the all-time high, since the top of the Bollinger Bands is only 2 points from it. Keep in mind that a 1% rise takes the S&P 500 to 1600.
One important note: The Federal Reserve’s Open Market Committee (FOMC) meets next week on Tuesday, with their announcement on Wednesday. Even a positive GDP report could be tempered by anticipation of the Fed meeting. Even if the markets shoot to all-time highs today, don’t expect them to finish there.
The S&P 500 levels to watch today:
UPSIDE: 1586 (April 11th’s low), 1588-1589 (2 data points), 1592-1593 (2 data points), 1595 (top of the Bollinger Bands), and 1597 (April 11th’s high and the all-time high). LAST CLOSE: 1585. DOWNSIDE: 1583 (April 24th’s high), 1578-1579 (3 data points), 1573-1575 (5 data points), 1570-1571 (3 data points, including March’s high), 1568 (April 10th’s low), 1567 (20 day moving average), 1566 (10 day moving average), 1551-1565 (29 data points), 1548 (April 22nd’s low and the 50 day moving average), 1543 (April 17th’s low), 1539 (2 data points and the bottom of the Bollinger Bands), 1536 (April 18th’s low), 1530 (February’s high), 1509 (January’s high), 1501 (March’s low), 1485 (February’s low), 1474 (2012’s high), and 1456 (200 day moving average).
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