Apple Stocks
How Tech Growth in 2015 Is Different from 2000 (and Why It Will Last)
By George Leong for Daily Gains Letter | Feb 18, 2015
The last time I saw 5,000 on the NASDAQ was way back in early 2000, prior to the collapse of the technology sector and all of the froth and euphoria on Wall Street. If you were trading back then, you would have recalled the staggering froth and frenzy that drove the technology sector to heights that were simply not sustainable and excessive.
Well, it took more than a decade, but it looks like the technology sector is on a roll again. I have been bullish on technology stocks as the top growth area in my outlook for this year and so far, this is panning out.
NASDAQ Push to 5,000 Much Different Now Than 15 Years Ago
The NASDAQ traded at its highest level since 2000 last Thursday, when the index came within 160 points, or 3.3%, of taking out the 5,000 level. A break above 5,000 would be a big deal for the technology sector.
Chart courtesy of www.StockCharts.com
Of course, the ascent of Apple Inc. (NASDAQ/AAPL) to nearly $130.00 a share and a staggering market cap of $741 billion is helping the index, providing stock market leadership.
As we near 5,000, there will be talk again of an exhausted and euphoric technology sector akin to 2000, but things are different this time around. The push to 5,000 has taken much longer and has been steadier versus 15 years ago, when everyone was buying without any thought to valuation or the underlying fundamentals.
I vividly remember seeing the big moves everyday and what I thought was the senseless buying of the technology sector. I recall friends taking out loans … Read More
Call Options: My Top Investment Strategy to Manage Risk and Gain Leverage
By George Leong for Daily Gains Letter | Feb 6, 2015
Using Call Options for Leverage and Risk Management
The other day I was thinking back years ago to one of the first handfuls of trades I undertook as a rookie trading the stock market.
The trade I executed was buying 10 call options contracts on Bank of America Corporation (NYSE/BAC). While I don’t recall the exact details of the trade as far as the strike price, premium, or the market price, what I remember was the leverage the option trade afforded me. I didn’t have enough cash to buy 1,000 shares of Bank of America, but I realized I could get a similar trade by buying 10 call option contracts. The trade paid off, I made some quick cash, and I was hooked on the options market.
Now many of you may not be familiar with call options, or options in general, but they are pretty straightforward as far as straight call options. Of course, there are more complex strategies, such as spreads, straddles, butterflies, ratios, and writing options, but I will focus on the use of call options as a starter.
Simple Investment Strategies Using Call Options
Call options are simply a leveraged bet on the stock moving higher by more than the premium paid for the option and commission by the expiry date of the contract.
If you are correct and the underlying stock or instrument moves above your breakeven, you walk away with good profits on the call option trade.
In the case that the stock doesn’t move above your breakeven for the call option trade by the expiry, you would lose the entire premium paid. This … Read More
Apple Now #1 in Smartphone Sales in China; Enough to Keep It on Top?
By George Leong for Daily Gains Letter | Jan 30, 2015
Tim Cook must be pleased with the results of Apple Inc. (NASDAQ/AAPL). Heck, the company sold an amazing 74.5 million “iPhones” and has become the top seller of smartphones in China, surpassing rival Samsung Electronics Co. Ltd. and China-based upstart Xiaomi Inc. (aka “the Apple of China”). Based on the numbers, China has become a massive growth region for Apple. But is the iPhone’s success enough to keep the stock on top?
Apple Stock Undervalued? Icahn Says So; I Say Maybe
I recently discussed Apple a few weeks ago when the stock was trading at $108.00. It’s now up $10.00 in little more than a week.
Chart courtesy of www.StockCharts.com
I just watched famed investor Carl Icahn on CNBC. He’s a major shareholder in Apple and a strong critic, especially when it comes to what to do with Apple’s massive $178-billion, or $25.00-per-share, cash balance. Icahn is bullish on Apple and believes the stock is vastly undervalued at around 10X its forward earnings when you discount in the free cash.
Now, I do agree with Icahn that Apple is worth more, but there are some issues the company has to deal with before I would agree with the $200.00 price he was throwing around.
In the fiscal first quarter, revenues grew 30% to $74.6 billion and made a staggering $18.0 billion, or $3.06 per diluted share. Of course, selling the number of iPhones it did definitely helps.
Apple’s iPhone Sales Enough?
Apple is clearly being driven by its iPhone, as sales of its “iPad” and “Macs” were soft. Moreover, the newly minted Apple “Watch” is seeing mixed results. (In my … Read More
Emerging Smartphone Maker Xiaomi Threatening Apple’s Chinese Expansion?
By George Leong for Daily Gains Letter | Jan 19, 2015
Apple Inc. (NASDAQ/AAPL) has become the Wal-Mart Stores Inc. (NYSE/WMT) of the technology sector stocks. Under the aggressive strategy of CEO Tim Cook, the company continues what its legendary founder Steve Jobs started—to rule the smartphone and mobile space.
The company has developed a cult-like following in the United States and is rapidly trying to take over the worldwide technology space. Apple is currently number two among tech stocks globally, with ample space to grow, especially in the smartphone-hungry Chinese market, where there are more than 800 million subscribers.
As far as technology stocks go, I have talked about Apple in the past and have long been a bull on the stock, believing the company could be the first to surpass the one-trillion-dollar valuation mark.
Apple a Heavyweight in the U.S. Tech Sector
What impresses me about Apple is its vision and strategy to move into other mobile applications, rather than simply relying on sales of its “iPhones.” The company is aggressive and works hard to defend its patents against all its rivals, including Samsung Electronics Co. Ltd., the world’s top maker of smartphones.
Apple is closely followed by its rivals. Even a patent for a camera system that Apple applied for a few years ago and was only approved last week wreaked havoc at GoPro, Inc. (NASDAQ/GPRO), the maker of head-mounted and underwater camera systems. While there was no evidence Apple was looking at a competitive product, the fear it generated among GoPro investors was massive and shows the threat Apple holds over its competitors in the tech sector.
With a market cap of about $634 billion and truckloads … Read More
