August 21, 2012
- A bubble even the mainstream can spot… But don’t let it blind you to a real, nonbubble, opportunity…
- No needles, simply pop it in your mouth: Patrick Cox reveals a revolutionary flu drug that just got even better
- Mining tech that could put Dow Chemical to shame: Byron King on a tiny company’s breakthrough that could bring minerals to market up to 99% faster
- Teen’s entrepreneurial spirit brought to life with $10 showers… an argument over whether carrots or sticks can keep congresscritters in line… your last chance to claim your “loyalty rewards”… and more!
Seek out the most uninformed investor you can find, ask him whether this chart looks like a bubble and you’re almost sure to get a “yes.”
[You can ponder here…]
OK, the chart picks up in early 1986 at essentially zero and ends in the present day at $664… and the stock is Apple. As of yesterday, AAPL became the biggest publicly traded company ever, with a market cap of $623.14 billion.
For once, even the mainstream financial press is skeptical.
Apple’s market cap, according to a Reuters dispatch “edged past the record of $620.58 billion set by Microsoft in 1999 at the height of the tech bubble.”
How impertinent! To invoke the memory of a burst bubble like that…
The only thing that would have made it better is a mention that MSFT’s market cap today is $258 billion… Heh.
“A lot of individual investors will at some point lose a lot of money,” suggested the Gloom Boom & Doom Report’s Marc Faber in late April, when AAPL was at $584. “Now, I have no idea whether Apple’s stock has already topped out (likely, in my opinion) or whether it will first soar to $1,000, as some analysts believe, and then top out.”
Somehow, we doubt he’s kicking himself for having missed the 13.7% appreciation since he wrote that.
Meanwhile, Apple now distorts every broad-based composite number it touches:
- The Nasdaq would be nowhere near 3,100 this morning without Apple, which comprises nearly 10% of the index
- Tech sector earnings per share since early 2011 are up 7%, according to Barclays. Without Apple, they’d be down 3%.
And now there’s a new number that Apple is skewing. But this one betrays a genuine moneymaking opportunity…
“The tech sector now pays more dividends — in dollar terms — than any other sector in the S&P 500,” says our dividend hound Jim Nelson.
“Obviously, the biggest factor in how that’s calculated was Apple’s massive $10 billion dividend rate — which still represents only a pathetic 1.7% yield because of Apple’s massive size. Apple pays the third-largest dividend in the index — again, on a dollar basis. So that helps.”
But here Apple is only a factor, not the factor… which is important if it’s income you seek.
Intel (INTC) raised its dividend twice last year. Cisco (CSCO) initiated a dividend only last year, and upped that payout by 75% last week.
“No one would have thought just a few years ago that tech companies would become crucial components to income portfolios,” says Jim. “But with Cisco’s announcement, that truth cannot be ignored any longer.”
Jim’s been on the case the whole time. His Lifetime Income Report readers are collecting tech payouts of 4.32%… 4.65%… even 6.27% (a lot more than Apple’s piddly 1.7%… or even Cisco’s 2.9%).
“Technologies across the board are what we see driving earnings and cash flow growth — and, in turn, dividend growth,” Jim goes on. “This trend won’t stop anytime soon. A theme we frequently touch on is the billions of people in emerging markets entering the middle class and buying their first computers and smartphones.
“While all these people come onto the grid, so to speak, the companies that make the products — and parts and software that make those products work — are going to benefit.”
“This is really stunning,” says Breakthrough Technology Alert’s Patrick Cox of a high-tech breakthrough that could stop flu in its tracks.
For nearly three years, Patrick has been tracking the progress of scientists using nanotechnology — picking apart molecules and even atoms — to fight the flu bug.
To date, test results using custom-built polymers to attack the flu virus have been more than encouraging: “The basic technology is, in my opinion, the biggest breakthrough in virus-borne disease since Edward Jenner developed the smallpox inoculation, which led to vaccines.”
Now comes an even bigger breakthrough: Up to now, this drug had to be injected before it could do the dirty work of dismantling flu cells in your body. But independent researchers have found that that these flu-killers can be taken orally. “These are early data,” Patrick says, “but it is critically important.
“Oral drugs have huge advantages over injected drugs. They can be prescribed and taken outside of the clinical setting. They can be delivered far more quickly because they do not require trained medical personnel. They are cheaper, therefore, and patients are much more likely to seek out and accept their usage.”
What’s more, “large doses can be delivered orally while maintaining extremely high profit margins.” How high? “Medicare pays a flat fee when a subject is hospitalized for influenza. Therefore, hospitals can make huge profits if they can accelerate recovery,” which this drug will. The company that makes it “could charge thousands of dollars for an influenza drug and have no problem selling product.”
And the applications go beyond flu. The same nanotechnology could be used to attack other viruses — “from HIV and herpes to dengue and Ebola,” as Patrick puts it.
“It’s revolutionary,” says Byron King, also on the trail of a high-tech discovery: This one could change the mining business forever.
If you remember, we mentioned Byron King’s “white sand” discovery a month ago: “Basically,” he explained “white sand shaves over 99% of the time from chemical extraction of metals — many different kinds of metals — from solutions. White sand also removes metals more efficiently and thoroughly from solution. And white sand is much less expensive than the other traditional item — the resin in the first beaker.”
Now imagine this “white sand” scaled up to separate valuable minerals from the ore in which it’s embedded.
No wonder Byron believes it has the potential to revolutionize the way the resource industry operates: “I’ve seen it. To my knowledge and understanding, there’s no chemical reason why it should not scale up,” he tells us.
“In fact,” he goes on, “from an industrial standpoint, you could probably just build modular units of modest size and add them up in series to match the available volumes of input.
“I don’t believe that the resin makers of the world (Dow Chemical, among them) know what’s about to hit them,” Byron imparts.
“It’s sort of like how Kodak invented digital photography, but didn’t market the concept, because they were making too much money off old-fashioned film. Kodak is now in bankruptcy, selling off parts to pay creditors.”
How far is this discovery’s reach? “There are surely apps here for uranium, copper, gold, silver and much more.
“Stand by,” Byron concludes. “We’re just on the ground floor for this.”
A select few readers already have the name and ticker symbol of this company… and the company behind the flu-killer drug… and the generous income payers Jim described earlier in this issue.
They also have access to Addison’s monthly Apogee Advisory. Plus, our penny stock picks. And they have access to all of Chris Mayer’s recommendations — including the “special situations” that come with much higher reward potential.
They belong to our Equity Reserve — a suite of services encompassing all our stock-picking advisories:
- “I love it,” says one member. “I’m amazed that I’m enjoying the services I hadn’t considered subscribing to MORE than the ones I had already subscribed to before joining the Reserve.”
- “My wife was laid off and her benefits just ran out,” says another. Using Equity Reserve recommendations, “she no longer has to worry about finding a job anytime soon… and our standard of living is going up. Woo-hoo!”
- With one of Patrick Cox’s picks, another reader says, “This single recommendation paid for my entire Equity Reserve membership!”
If it’s stock research you want, the Equity Reserve delivers everything our team unearths. And with our “loyalty rewards” program, we’re making it more accessible than ever to current subscribers. To learn how much you’re entitled to, follow this link. Be advised, the rewards will expire at midnight tonight. Claim yours here.
Major U.S. stock indexes are showing signs of life today. The S&P 500 might even set a new high by day’s end — both year to date and post-2007. At last check, it’s 1,426.
Meanwhile, gold sits at its highest level since early June — $1,639. Silver continues on a tear, racing up 2% to $29.39.
Some of the metals’ strength can be chalked up to dollar weakness. The dollar index has broken below 82 for the first time in six weeks.
“We had two things move the currencies higher overnight,” writes Chuck Butler from his post at EverBank World Markets in St. Louis. First were minutes from the Australian central bank’s latest meeting… in which there was no chatter about the need to cut rates.
“Then came the news that concessions are possible for Greece so long as Prime Minister Samaras shows a willingness to meet the main targets set out in his country’s bailout program. The markets like hearing this news, for it gives Greece a little breathing room.”
With that, the euro has lifted above $1.24 for the first time since early last month.
Behold, a new road map for college-goers. It is described as follows by colleague Chris Campbell…
- Start a successful business and sell it…
- Go broke paying for college
- Study many things you could figure out on your own for free… and faster.
- Graduate.
- Work for someone else… if you’re lucky…
Well, that’s the track 18-year-old Evan Jensen is chugging down…
After recently witnessing an urgent need resulting from North Dakota’s oil boom, Jensen found a way to knock out two birds with one stone: Pay for rising college costs and capitalize on the boomtown stench forming in the Midwest.
“While we were there, we were getting pretty smelly,” said Evan about a family trip to Williston to help find work for his brother.
After peering behind the shower curtains of the local truck stops, Evan noticed something amiss. “I mean the truck stops — they’re just nasty,” he said. “They’re hard to get in and out. You get to certain ones … and it’s just a zoo.”
One man told Evan he would drive 60 miles out of his way for a good shower.
On the drive home, Evan concocted a business plan, and a week later, he and his family got to work.
Showers cost $10 each, although you get 50% off if you live in the makeshift village where the semi is parked. Jensen is still recovering his startup costs, but he’s already looking to unload the business: It’s on Craigslist for $95,000 “or best offer.”
With that, he hopes to pay for music school in Minnesota…
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“Assuming he meant we should all pay more to the morons in Congress just so they would do their job is the wrong way to go. They have already received their carrots and eaten them, many times over. Now they need to feel the stick instead!
“Kick out all the incumbents and replace them with people who promise in writing and on TV to put in legislation that states all members of Congress receive pay, expenses or pension credits only from a balanced budget. Maybe they would become a little more eager about working on the real problems.”
The 5: Kick out all the incumbents? Even in the 2010 midterms, 85% of House incumbents won re-election… and that’s the lowest re-election rate going back to at least 1964.
No, we’ll stick to our knitting: The problems are way beyond the capacity of electoral politics. Vote if you want to this fall, but take matters into your own hands first.
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The 5: Thank you. If you value the guidance you get from our paid publications, a few hours remain in which you can get our full range of stock-picking advisories… in a package deal that we won’t offer again for several more months.
Cheers,
Dave Gonigam
The 5 Min. Forecast
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