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Why I’m Thinking of Buying Apple Stock

 

Image representing iPhone as depicted in Crunc...

Image via CrunchBase

 

I was once a Windows PC person, until I bought an iPhone. What made me buy an iPhone? Last April, I was thinking of buying either a Blackberry or an iPhone. I had been using a Motorola for over a year, and it seemed that I was a bit behind in following cell phone trend as compared to my friends, most of them already had a Blackberry. I love gadgets, but at the time I restricted myself from buying anything other than PCs or notebooks, for the reason that anything with a screen smaller than 13 inches I considered too small and not worth looking at.

But as a technology person, I thought it was time that I shouldn’t be behind the others. So I considered buying a Blackberry until one day my wife came up to me and pointed out two things. One, Blackberry is good for chatting and for some reason my wife and I tend to connote chatting with gossiping, … so that wasn’t me. Second point, she had noticed that technology savvy people preferred an iPhone than a Blackberry, … and I always consider myself as a technology savvy person. I was convinced that I was an iPhone person than a Blackberry person, but I still didn’t buy it considering that I still loved my Motorola V8.

Fate changed my intention not to quickly purchase a new cell phone. One day, as I was rushing back to my seat at the office, I bumped into a corner of my desk. I had my Motorola in my right hand trouser pocket, and that was the point that hit the corner of the desk. It was a hard bump and when I took out the Motorola from the pocket, I discovered that the screen was internally broken. I tried to switch it on, but it was kaput. The next day, which happened to be a public holiday, I went to an Apple store and bought an iPhone.

As soon as I got home, I charged my new iPhone and waited for about four hours for a full charge. When the battery was full, I switched on my iPhone and experienced my first real interaction with an Apple (not taking into account of the old times when I owned an Apple IIc in the 80’s). It was cool that I was able to swipe my finger and moved from a screen of application icons to the next. It was cool that I was able to tap my finger on an application icon and interacted with the application with the touch of a finger. I downloaded a few more applications and spent the next 8 hours trying out the different applications. It was incredible that small applications could be so entertaining. I had always thought complex programs with complex graphics were the kinds that could grab my attention for hours. Anything less, I had considered inferior. Apple applications opened up my eyes. Simple programs can give appealing graphics and can also make you immerse yourself with the gadget for hours.

I realized from that day on, Apple products are cool. They are not the results of a hype. I had originally thought that Apple fans were just a different bunch of people who were not so technology savvy. Physical design was the only thing that mattered to them, they got hyped up by advertisements and used an Apple product just to impress others. Well, that’s probably true for some, but the truth that I learned was that Apple products are cool, not just because they are physically appealing, but also the user interface design is great. You feel that you’re in a different computing world when you use an Apple product. The touch is pleasing and the graphics, from icons to menus to the aesthetic look of applications, all are pleasing to the eye.

So as I admired my brand new iPhone, I said to myself, the next notebook that I am going to have will be an Apple. A few months after that, I bought myself a MacBook Pro.

When you think a product is good, that serves as a foundation of buying the stock of the company that produces the product. That’s why I’m thinking of buying AAPL. Now, it’s a waiting game: waiting for the market to confirm an uptrend and also for the ADX indicator on AAPL price chart to come back up to 30 or above. I’m a safe player, I will wait for the two conditions to be fulfilled.

Disclaimer: Techniques or analysis covered on this website are to be used at your own risk. I cannot guarantee the outcome of applying any of the techniques or analysis, will always be in your favor. You must always do your own analysis and make your own decision before you purchase a stock.
“Stock of the Week” is not a recommendation of stock. It is a coverage of an interesting stock. Unless otherwise stated, no actual purchases or sales of stocks are undertaken. Actions taken are only simulated trading.

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Stock of the Week – BFR – Part 3 of 3

BBVA Banco Francés (casa matriz)

Image via Wikipedia

Market – S&P 500: No change today – MA(50) is still below MA(200). Cannot confirm an uptrend yet, but closing in. Better not to buy any stocks at this time.

BFR – Banco Frances S.A., Financial, Money Center Banks, Small Cap Blend, Based in Argentina, $9.65 (24 Sep 2010)

Collection of articles related to BFR:

  1. Interestingly, BFR has made into Zacks’ strong buy list on 5th August 2010: Zacks #1 Rank Additions for Thursday.
  2. BFR is considered a “thinly traded stock”. That could mean it is sensitive to changes in the market or changes caused by news on the company. On the negative side, negative news can bring down the price easily and in large amount, but on the positive side, the price can jump up rather significantly; Investors.com, 9 Sep 2010, Top Groups Yield 14 Hefty Dividend Plays.
  3. BFR came out second in The 15 highest-Yielding Bank Stocks, Fools.com, 31 Aug 2010. 8.65% dividend yield is a nice return in addition to the possibility of the price increasing in the next one year.
  4. Thestreet.com, in their 30 Aug 2010 article, Foreign Banks Prowl for U.S. Acquisitions reported “… BBVA (BFR) and Banco do Brasil all recently announced or hinted that they are scoping out acquisitions of US Banks, …”. This is a sign of growth. It’s strengthening its market base, readying itself for US economic turn-around. When that happens, investors should also gain from having a long position in BFR.
  5. Let’s now look at Argentina, how is it faring economically as a country? The author of an article titled BBVA Banco Frances: A South American Bank You Don’t Know, seekingalpha.com, 26 August 2010, gives his opinions: “… Argentina may have turned a corner for the better and possibly a return to capitalism and steady growth as long as they can avoid some politics and keep out socialist tendencies …”. Furthermore, on BFR itself: “… they have a lot of short-term capital on their books waiting to be loaned out at higher rates.” When I first found BFR, the first thought that crossed my mind was that it was a foreign bank. I did not know how Argentina’s economy is doing. The only thing that I know about Argentina is its excellent soccer players like Maradona and Messi. Well, this article provides a rather positive view on Argentina and it shows that BFR still has large capital that can potentially be turned into more revenue.

Disclaimer: Techniques or analysis covered on this website are to be used at your own risk. I cannot guarantee the outcome of applying any of the techniques or analysis, will always be in your favor. You must always do your own analysis and make your own decision before you purchase a stock.
“Stock of the Week” is not a recommendation of stock. It is a coverage of an interesting stock. Unless otherwise stated, no actual purchases or sales of stocks are undertaken. Actions taken are only simulated trading.

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Stock of the Week – BFR – Part 2

BBVA Banco Francés (casa matriz)

Image via Wikipedia

Market – S&P 500: No change today – MA(50) is still below MA(200). Cannot confirm an uptrend yet. Better not to buy any stocks at this time.

BFR – Banco Frances S.A., Financial, Money Center Banks, Small Cap Blend, Based in Argentina, $9.65 (24 Sep 2010)

I managed to get BFR’s earnings for the last 5 years. As shown on the table below, BFR has been making positive growth earnings from ARS 428.7K in 2005 to ARS 658.7K in 2009. Note that 1 ARS (Argentinian Pesos) is equivalent to $US 0.2520. BFR’s EPS has steadily increased from US$ 0.22 in 2005 to US$ 0.34 in 2009. The growth of the EPS for the last 5 years is between 8.54% to 17.64%. Not the spectacular growth that we’re after but it is good enough as the bank shows consistent growth in its earnings. Plus the bank gives out a dividend yield of 8.65%, which is a steady additional annual return for a long-term investor.

Stock of the Week - BFR

Disclaimer: Techniques or analysis covered on this website are to be used at your own risk. I cannot guarantee the outcome of applying any of the techniques or analysis, will always be in your favor. You must always do your own analysis and make your own decision before you purchase a stock.
“Stock of the Week” is not a recommendation of stock. It is a coverage of an interesting stock. Unless otherwise stated, no actual purchases or sales of stocks are undertaken. Actions taken are only simulated trading.

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Stock of the Week – BFR

An assortment of United States coins, includin...

Image via Wikipedia

Market – S&P 500: MA(50) is still below MA(200), but it seems to be closing in on MA(200). It may cross in a few days. Not a confirmed uptrend yet. Better not to buy any stocks at this time.

BFR – Banco Frances S.A., Financial, Money Center Banks, Small Cap Blend, Based in Argentina, $9.65 (24 Sep 2010)

My stock screener has turned up names that I have not heard of before, and this time it is an Argentinian bank (Previously, the screener brought me HANS and BRKR). Although one of the filter conditions in the screener was a market capitalization of size mid cap and large cap, the screener included BFR which can be categorized as small cap blend. Its market capitalization value is US$ 1.7bio with a price under $10.

Like the previous two stocks of the week, BFR has also been covered by fool.com. Apparently, it got picked up by their screener that selects highest yielding stocks in the banking industry. BFR came second (after STD), with a dividend yield of 8.65%. This is good as investors can earn return from dividends as paid out by companies they buy. However, it is not normal for companies with high growth rate to pay out dividends. Growth rate companies tend to use the money earned for further expanding its business rather than paying out dividends. We should look at other factors before we can decide if BFR is good for long term investment or not.

Anyway, the market situation still does not confirm an uptrend, hence at this stage, we should still wait.

Disclaimer: Techniques or analysis covered on this website are to be used at your own risk. I cannot guarantee the outcome of applying any of the techniques or analysis, will always be in your favor. You must always do your own analysis and make your own decision before you purchase a stock.
“Stock of the Week” is not a recommendation of stock. It is a coverage of an interesting stock. Unless otherwise stated, no actual purchases or sales of stocks are undertaken. Actions taken are only simulated trading.

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Investment Books that I Like

Cover of "Trading for a Living: Psycholog...

Cover via Amazon

 

I just realized that over the years since I had first learned investing in the US stock market, which started 12 years ago, that I have collected quite a number of good books on investment that can be considered as classics. I have to be honest that I stopped following the market in 2001 and started to follow it again just a couple of months ago. When I looked at my book cabinet, I realized that I have quite a collection of books that are good references. I re-read some of the books and re-learned the knowledge quite fast.

I would like to give a brief review of the books. Here’s some of the books that I own and what I learned from them:

1. Trading for a Living by Dr. Alexander Elder

The book covers three essential aspects that you need to adopt when you want to commit yourself to trading. First is psychology: it covers the fact that market is driven by mass psychology. People get scared and sell or get excited and buy, and hence the mass psychology of the market determines the direction of the market. Second is Trading Tactics: here, the book explains on many technical aspects of stock trading mostly from charting perspective. Third is money management: manage your emotion by having a strategy in how much you invest on a stock and when you need to exit. You must have rules so that you don’t decide based on your emotions. With money management, you have to make sure that you don’t lose out all your investment in a few trades.

I like the book because it prepares you on how to become a good trader. It does not make you a good trader right away, but by knowing the basics, you can be prudent.  Experience over time makes you a good trader. This book ensures that in the process of becoming a good trader you don’t quickly lose out money and quickly get thrown out of the market.

2. One Up on Wall Street by Peter Lynch with John Rothchild

Fundamentals is the key word that I learned from this book. Unlike “Trading for a Living”, this book does not teach you to rely on charts, but more to understanding the fundamentals of the company. Peter Lynch advises us that understanding the products and services of a company enables us to have a sense on how well the company is going to perform. If you like the product of a brand, then that’s a start. You can put more time in studying more fundamental aspects surrounding the company. The book covers some crucial fundamental numbers that you have to understand about the company.

I like the book as it provides you with some fundamental knowledge on how to understand a company from the fundamental point of view. It talks about how important company earnings are. It also covers much on the P/E ratio and how you should use the ratio to determine if the price of the stock is fair or not. The book is a good reference that you can go back into every now and then.

3. How to Make Money in Stocks by William J. O’Neil

The book gives you a mix between fundamental and technical. O’Neil has a system called CANSLIM. He makes sure that you understand how the market is currently performing. No need to go against the tide as most of the time you would lose. He wants you to look at the performance of a stock through earnings for the last few years, comparing year-to-year performance as well as quarter-to-quarter. The book also covers about charting, but more with eyeballing technique. There are chart patterns that people can recognize which indicate that a stock is going to make a significant gain.

This was the book that I first studied seriously. It opened up my eyes on how to carefully enter the stock market world. We need to look at stocks from both the fundamental and technical aspects, but before you decide to buy know where the market is heading.

4. The Motley Fool Investment Guide by David and Tom Garner

The book raised my interest in the stock market. Things are not as difficult as people say. You don’t really need to be a chartered accountant to evaluate stocks. The two brothers teach you fundamental numbers in a simplistic way. ‘Anybody can do it’ kind of attitude, which is true as the book reveals. The book is also a good reference on the fundamental numbers. I also bought another book written by the brothers, “The Motley Fool‘s Rule Breakers, Rule Makers”, but I was not too impressed with it – it’s a bit confusing to follow.

5. The Warren Buffett Way by Robert G. Hagstrom, Jr.

A book that preaches on buy and hold. Understand the company and buy it for the value. The book is a good read, but I do not use it as a reference. It tells you how Warren Buffett carefully evaluates companies that he wants to buy. He has an eye for companies that will produce products or services that bring value to the general public. Hence, by investing into such company, in the long run, the company will grow considerably and you will make considerable gains. Your portfolio should contain stocks of such companies. There may be a few laggards in the portfolio, but the negative value of the laggards should be greatly outnumbered and out-valued by the strong performers, hence the net result should be a large gain that brings you wealth.

Books make you smart. People must equip themselves with the right knowledge before they enter the market. In later posts, I will review some of books above in greater details.

Disclaimer: Techniques or analysis covered on this website are to be used at your own risk. I cannot guarantee the outcome of applying any of the techniques or analysis, will always be in your favor. You must always do your own analysis and make your own decision before you purchase a stock.
“Stock of the Week” is not a recommendation of stock. It is a coverage of an interesting stock. Unless otherwise stated, no actual purchases or sales of stocks are undertaken. Actions taken are only simulated trading.

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Stock of the Week – BRKR – Part 2

Bruker Corporation logo

Image via Wikipedia

S&P 500: MA(50) is still below MA(200). Better not to buy any stocks at this stage.

BRKR – Bruker Corporation: Technology, Scientific & Technical Instr., Mid-Cap Growth, $13.62 (17 Sept 2010).

In my earlier post, I said I do not understand Bruker as I do not understand the company’s products or services. Well, in a way I feel that it is a pity that a company that turns up in my screener is to be ignored entirely. Perhaps I should dig a little bit deeper. Fortunately for me, WordPress provides its bloggers with Zemanta, an application that automatically suggests related pictures or articles to the post that we make.

Zemanta suggested 3 links in my post “Stock of the Week – BRKR” and I thought: why don’t I see what those articles are, perhaps they will reveal some interesting stuff on BRKR. … Yes, they do show some interesting things:

1. “A Coming Bruker Superconductor IPO (BRKR, ESCT)“, 247wallst.com, dd. 3 Sept 2010: the article reveals that Bruker has a subsidiary, Bruker EST, that generated $1.11 billion of revenue in 2009 and Bruker is filing for an IPO for EST with a stock ticker ECST in Nasdaq. The size of the IPO is going to be $100 million. This shows that BRKR is a company with definite growth. About Bruker EST, the article states: ‘Bruker EST is a superconducting technology and enabling tools company that makes materials and devices for growing markets in renewable energy, energy infrastructure, healthcare and what it calls “big science” research’.

2. “Is Bruker Corp. Growing Foolishly?“, Fool.com, dd. 10 Aug 2010: “Life sciences and materials research company Bruker Corp.(Nasdaq: BRKR) has produced Foolish growth for some time now. Its return on invested capital remains greater than 15%, while most companies’ cost of capital comes in between 8% and 12%. So not only is it creating value, it’s growing faster than the competition, …”. Its five-year sales growth is 29.5%, it is higher than its competitors, Danaher and PerkinElmer with growth rates of 10.4% and 5.3% respectively. Bruker expands and creates value, hence it is worth considering.

3. “Bruker Announces New Scientific Instruments and Software, plus Innovative, Turn-Key Analyzers for the Pharma, Food, Solar, Metals and Advanced Materials Industries”, EON: Enhanced Online News, dd. 23 March 2010: the article says that Bruker launches 9 products and solutions in 2010 alone. The article describes briefly what the 9 products and solutions are, but they are so technical, I’m not sure what they are. Importantly is the fact that a science and technology online news service writes an article on Bruker indicates that it is quite well-known in its industry.

The above articles help us to understand how Bruker is faring in its industry. Despite what I said in my earlier article, it is worth considering. The good thing is that I found these article with the help of a WordPress application, Zemanta. Not only it gives readers of a blog other articles related to the blog, but it also helps the blogger to find other views on his subject matter.

Disclaimer: Techniques or analysis covered on this website are to be used at your own risk. I cannot guarantee the outcome of applying any of the techniques or analysis, will always be in your favor. You must always do your own analysis and make your own decision before you purchase a stock.
“Stock of the Week” is not a recommendation of stock. It is a coverage of an interesting stock. Unless otherwise stated, no actual purchases or sales of stocks are undertaken. Actions taken are only simulated trading.

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