Tag Archive | AAPL

Position Sizing: Key to Maximizing Returns

In a time when market volatility and equity preservation is of utmost importance, determining the correct number of shares to buy, or “position sizing”, is key to maximizing returns and minimizing risk.

The common investor generally doesn’t spend much time thinking about how many shares to buy or how significant of a position to take.  Instead, most investors use a common methodology of trading the same number of shares each time, which usually translates to a specific dollar amount.  Other, more sophisticated investors, opt to allocate a certain percentage of their portfolio value to a specific position. Following this train of thought, a new position in a portfolio of $100,000 would transcribe either a $10,000, or 10%, investment or a usual position of 50 shares.

Although these methods may work for some, using the volatility of a specific portfolio is likely to be the most effective decision tool.  Measuring a portfolio’s overall volatility enables an investor to decide on what percentage of that portfolio he is willing to risk losing on the new position.  This methodology is better explained through the following example. Read More…

Why Does Wall Street Hate Silicon Valley?

By Chris O’Brien, Mercury News Columnist

Apple’s (AAPL) stock price has tripled in the past two years, making it the second most valuable company in the U.S. Profits and revenues at other tech companies are soaring. And investors can’t wait to get their hands on the latest social networking IPO.

All of which makes it strange to ask: Why does Wall Street hate Silicon Valley?

And it’s not just me saying this. “The public markets hate tech,” said Marc Andreessen at the recent D: All Things Digital technology conference. He’s as plugged-in as anyone in the valley, so he’s worth listening to.

Sounds crazy, I know, but consider this: By one of the most fundamental methods investors use to value stocks, Wall Street thinks more highly of dowdy PG&E than it does of mighty Apple. And Apple’s not the only big tech company that’s lost Wall Street’s love.

If that surprises you, wait until you hear why: Wall Street thinks we’re getting old. Yes, after years of parading sexy Silicon Valley around on its arm, the stock market has dumped us.

Read More…

The Four Horsemen of the Tech Market

 by Raghu Gullapani,  SmartStops.net contributing editor
 

AAPL GOOG  IBM  AMZN 

Over eight months the market has steadily climbed up. This climb has been led by the technology sector. Four explosive companies have led the charge.
  
Apple (AAPL) has led the charge but of late, the charge has stalled. This slowdown in forward momentum is reminiscent of price action last summer. From a technical perspective, the stock has been forming a bull flag and has been holding above its 55 & 210 ema. I would be hesitant to invest more than a feeler at this point until it more clearly resolves to the upside and starts to break above resistance at $360.   SmartStops.net indicates the short-term stop is $341.06 and the long-term stop is $339.49
 
Google (GOOG) has been the laggard in this group for some time now. Lower than expected earnings and the market’s disdain for new CEO Larry Page have led it down. And while it may be tempting to buy on recent news, the technicals don’t bear it out. The stock is trailing the 55 and 210 ema.   Smartstop.net projects the short-term stop is $527.77 and the long-term stop is $525.04
 
IBM (IBM) has shown relative strength, leading the 55 and 210 ema. After a brief pullback the stock looks like it may make new highs.   Smartstops.net  has the short-term stop at $165.73 and the long-term stop at $158.75
 
Amazon (AMZN) has been the recent leader in this group after nearly bouncing off it 210 ema. The stock is showing a lot of relative strength and looks to continue to make new highs. Smartstops.net has the short-term stop at $187.85 and the long-term stop at 168.24
 
The four horsemen were leading indicators of doom.   Keep an eye on leaders to protect yourself from volatile markets.  Market leaders are known to drop 72% from their peak per Investor’s Business Daily.

Four ETFs Driven By Apple and IBM’s Stellar Performance

Technology giants, Apple Inc. (AAPL) and International Business Machines (IBM) reported stellar quarterly earnings, smashing analyst expectations and shinning a ray of light on the technology sector and the exchange traded funds (ETFs) that track it.

Apple reported a fourth quarter increase in revenue to $26.7 billion, while boasting gross margins of 38.5 percent and net income of $6 billion, or $6.43 per share, beating Apple’s own forecasts of revenues of $23 billion and a gross margin of 36 percent.  Furthermore, these numbers crushed the $3.38 billion in net income that the Cupertino, California-based company boasted for the same period the previous year.  This jump in revenue was primarily driven by increased consumer spending and hence better than expected sales, which included 16.24 million iPhones, 7.33 million iPads, 4.13 million Macs and 19 million iPods.  Analysts were expecting sales in the realm of 15.5 million iPhones, 6.2 million iPads, 4.2 million Macs and 19 million iPods.  Read More…

Three ETFs To Cash In On Intel

Chip bellwether, Intel Inc. (INTC), recently reported a quarterly profit of $3.39 billion, up nearly 48.7 percent from a year earlier, giving further confidence that the economy is improving and shinning a ray of light on exchange traded funds (ETFs) that track the semiconductor industry.

This profit of $0.59 per share came despite weaknesses seen in the consumer personal computer world and was primarily driven by increased business server demand, which aided in pushing revenues up to $11.46 billion.  This indicates that businesses are starting to loosen the grip on their wallets and make the purchases that were once put on the back burner in order to reduce operational costs.  Read More…

Three Tech ETFs To Be Boosted By Mobile Phones

The launch of new products, rapid growth smartphones and an increase in replacement sales enabled the mobile phone sector to post second quarter growth paving the path to opportunity for the Technology Select Sector SPDR (XLK), the iShares S&P Global Technology (IXN) and the PowerShares QQQ (QQQQ).

According to research firm IDC, manufacturers of mobile handsets shipped a more than 317 million units worldwide in the second quarter of 2010, marking an increase of 15% year-over-year.  One reason behind this demand is the increased appeal of smartphones.  The research firm further stated that sales of smartphones, which account for nearly 19.8% of all mobile device sales, grew nearly 50% year-over-year and is expected to continue to grow.  Drivers behind this exponential growth included an improved business environment, healthy operator subsidies, vigorous competition between vendors, and a growing tide of lower-cost models. Read More…

Cushioning Losses With ETFs

As the markets continue to witness enhanced volatility and uncertainty, exchange traded funds (ETFs) which employ options as a way to hedge bets can provide insurance and additional income.   

These ETFs generally hold stocks while writing call options against their respective index, which enables one to have somewhat of an insurance policy against a downward spiraling market.  Additionally, these ETFs generate income when they sell their calls, which could dwindle away losses generated from a falling market. Read More…

3 Domestic Plays On Emerging Markets

According to projections from the International Monetary Fund, China, India and Brazil are expected to be the economic growth leaders of the year and it is possible to reap the benefits of this international growth domestically.

In addition to being cheaper, domestic stocks that are likely to benefit from international growth tend to be less volatile, have less risk and are more liquid than those of emerging markets. As these nations grow and develop, demand for energy, technology and industrials will likely surge. Read More…

Changes In Consumer Spending Boost Appeal in Technology

Despite an uptick in personal savings rates and lackluster results on overall consumer spending, electronics are causing consumers to reopen their wallets, further boosting the appeal of the technology sector.

According to a report released by the Commerce Department, outlays of televisions, computers, video and telephone equipment grew by 1.8% in the first six months of 2010, compared to the first half of pre-recession 2007.  In comparison, during the same time periods, sales of appliances decreased by 3.6% and that of furniture declined by a whopping 11%, indicating that consumer trends are shifting.  The report also indicated that overall consumer spending remained flat in June from the previous month and U.S. personal savings as a percentage of disposable income rose 6.4% from a month earlier.  Read More…

Three Tech ETFs To Play Apple And Microsoft

After reporting stellar quarterly financials, Apple (AAPL) and Microsoft (MSFT) remain attractive and for good reason.

In the fiscal third quarter, innovation king Apple, boasted revenues of $15.7 billion, up more than 61% from a year ago, yielding profits of $3.51 per share.  These results smoked Wall Street’s revenue expectations by nearly $1 billion and painted a rosy picture for the second-largest U.S. listed stock by market cap. 

One reason Apple is likely to continue to shine is that demand for the iPhone 4 remains insatiable despite reports of reception problems.  Additionally, the Cupertino, California-based technology firm recently updated its all-in-one iMac desktop computer line with new chips from Intel (INTC) and better graphics, which is expected to further boost appeal of iMacs.  In the most recent quarter, Apple sold 1 million desktop Mac units, an increase of 18% from the prior year, generating nearly $1.3 billion in revenue.  Currently, it is estimated that Apple is the fourth largest computer vendor in the U.S. with nearly 8.8% of the market share, giving the company the opportunity to grab more market share. Read More…

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