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Cash in as the "Alibaba Shockwave" Creates the World's First Trillion-Dollar Company

How many times have you been reading about a long-ago historical event – or been watching a documentary about it on the History Channel – and thought to yourself: “Wow, it would’ve been really cool to have actually been there to see this happen.”

I couldn’t agree more: As a big history buff myself, I find myself making that statement on a regular basis.

  • Apple Bond Offering is Proof It'll Do Anything to Avoid Taxes Company Apple logo

    The record $17 billion Apple bond offering this week will do more than just placate shareholders eager to get some benefit from the company's $144.7 billion in cash.

    It will help Apple Inc. (Nasdaq: AAPL) avoid paying taxes, a feat that the Cupertino, CA tech giant has elevated to a high art.

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  • Apple Stock May Not Climb, But Will Still Reward Investors Company Apple logo

    There was really only one good thing for Apple stock investors in yesterday's (Tuesday's) earnings report.

    Apple Inc. (Nasdaq: AAPL) announced an unprecedented share buyback program and boosted its dividend in attempts to pacify edgy investors who have watched the company's stock tumble about 34% over the past six months.

    The iPhone maker will return $100 billion of cash to shareholders by 2015, through an increased dividend and $60 billion share buyback program. Apple's quarterly dividend was sweetened 15% to $3.05 a share. The stock now carries a juicy 3% yield. The new dividend is payable on May 16 to shareholders of record May 13.

    With an annual payment of some $11 billion, Apple becomes the biggest dividend payer in corporate America, taking the crown from Exxon Mobil Corp (NYSE: XOM).

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  • Apple Stock is Up After Earnings – But Are Gains Here to Stay?

    Apple stock was up 5% in after-hours trading Tuesday when its earnings report turned out to be better than expected - but, not great.

    Everyone was bracing for the worst when Apple Inc. (Nasdaq: AAPL) released second-quarter earnings Tuesday after the close. The big question was just how bad things were going to be.

    The answer turned out to be... not so awful. The iPhone maker surprised Wall Street with better than expected numbers, mostly because expectations were so low.

    However, as expected, forward guidance was glum.

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  • Apple Stock Rises Before Earnings, but No One's Expecting Good Numbers

    Apple stock was up nearly 2% by noon today (Tuesday) - but this could be the end of gains for a while depending on what happens this afternoon.

    Undeniably the most anticipated earnings report of the season is the Apple earnings report, due out after the close Tuesday. Expectations are for a downright dismal quarter.

    Among the issues Apple Inc. (Nasdaq: AAPL) is expected to address include:

    • iPhones: Apple generated some $22.7 billion from the sale of 35 million iPhones in the same quarter a year ago. Investors will want to hear how much competition from other smartphone markers, like Samsung, has chipped away at those numbers.
    • iPads: Apple sold 11.8 million iPads that generated $6.6 billion in sales over the same period a year earlier. With the bevy of new and cheaper tablets now on the market, it is unlikely Apple has been able to maintain those robust sales.
    • Gross Margins: Gross margins peaked at an astounding 47.4% during this quarter last year. Apple's warning last October that margins could drop as low as 38% was the catalyst behind the stock's steep plunge. In January, Apple said profits should come in around 37.5% to 38.5%. These numbers are crucial.
    • Revenue and Profit: Last year, Apple earned $12.30 a share on revenue of $39.2 billion. Estimates are for $10.12 a share on revenue of $42.6 billion. Even the slightest miss could wallop shares.
    • Guidance: Most importantly will be what the company says about future quarters. Analysts expect Apple to guide lower, at least for the next couple of quarters.

    Of particular interest will be what Apple plans to do with its hefty $157 billion cash stash. A special or increased dividend and a bigger share buyback could provide a temporary boost to the stock. But any gains are likely to be short lived.

    "People have to be patient. The next quarter will be disastrous and the quarter after that stock will only go in one direction and that is down," Trip Chowdhry, co-founder of Global Equities Research told CNBC.

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  • Apple: Cash or Trash? The market's North Star of growth is going to report earnings tomorrow. Good news or bad news isn't the real question.
    The question is: With Apple off nearly 50% from its $705.07 a share high set last September, is the famed tech giant a "buy" again?
    Here's my unequivocal answer...
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  • Keith Fitz-Gerald: "I am Buying Gold and I Intend to Buy More if It Goes Down" Keith gold 2 Apple plunged below $400 per share, while gold prices remained well under $1,400 an ounce.

    What's going on in the markets?

    Stuart Varney of Fox Business' "Varney & Co." put that question to Money Morning Chief Investment Strategist Keith Fitz-Gerald Thursday.

    Of Apple, Keith said, "I wouldn't touch it," then ticked off a number of reasons.

    But Keith had a decidedly different take on gold, saying, "I am buying gold and I intend to buy more if it goes down, and I hope I'm smart enough to do it for a long time to come."

    Asked what else he's investing in, Keith said he's "cautiously buying" energy, defense technology and medical technology stocks.

    To hear more from Keith on these topics as well as his view of the massive money-printing in Japan, watch the video below.

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  • An Apple Stock Dividend Hike Could Help Set Cash Hoards Free Company Apple logo

    If Apple Inc. (Nasdaq: AAPL) actually does what many now expect - raise the Apple stock dividend as much as 56% - it could help inspire a trend of givebacks by other cash-rich companies.

    Looking at the company's cash hoard of $137 billion - which could reach $170 billion by year's end - a survey of analysts conducted by Bloomberg News this week concluded that an Apple stock dividend hike of $4.14 a share is a likely possibility.

    That would raise the stock's yield from about 2.40% now to a much more attractive 3.6% -
    higher than 84% of the other dividend-paying companies in the Standard & Poor's 500 Index.

    An increase in the Apple stock dividend would almost certainly boost the stock price, which is down about 35% from its Sept. 19 high of $702.10.

    "The accumulation of cash has become excessive," Brian White, an analyst at New York-based Topeka Capital Markets Inc., told Bloomberg. "It doesn't matter which bearish scenario you forecast, they're never going to need this much cash."

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  • Dumping Apple Stock for Google: How Investors Could Get Burned GOOG

    Talk about two stocks going in the opposite direction: Apple stock (Nasdaq: AAPL) is trading near its 52-week lows, while Google Inc. (Nasdaq: GOOG) recently hit an all-time high.

    The trend has some wondering if investors are consciously moving their money from one tech giant to the other.

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  • What Should Apple Do with its $137 Billion Stockpile of Cash? safe

    Apple Inc.'s (Nasdaq: AAPL) been in the news a lot of late as its stock plunged. Meanwhile, the company sits on a cash pile of $137 billion.

    When Apple stock was soaring, investors were happy. But since its stock value plunged some 35% since September, many investors have suggested Apple should share some of itsaccumulated wealth. Fund manager and investor David Einhorn went so far as to sue the company to try to force it to share more of its cash with shareholders.

    Money Morning Chief Investment Strategist Keith Fitz-Gerald was asked on FOX Business what Apple (Nasdaq: AAPL) should do with its stockpile of money: Should the company pay dividends to shareholders, pursue major acquisitions or just keep its large cash position for future investments or other costs?

    Check out what Fitz-Gerald and other panelists said on the FOX Business report in this accompanying video.

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  • Apple iWatch, Google Glass First Shots in New Clash of Tech Giants appleiwatch

    Coming less than a year after Google unveiled its Google Glass Web-connected eyeglasses, reports that an Apple "iWatch" is in the works emphatically confirm that the battle is now joined for dominance over the next wave of tech - wearable computing.

    According to the reports, Apple Inc. (Nasdaq: AAPL) has 100 people working on an iWatch users would wear on their wrists, but that would have many of the same capabilities as an iPhone.

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  • The China Smartphone Brand That's Beating Apple (Nasdaq: AAPL) Tech generic smartphone small

    Most investors who pour money into smartphone makers look to dominant players like Apple Inc. (Nasdaq: AAPL) - but they're missing a bigger part of the market.

    The global smartphone industry is changing dramatically, as China surpassed the United States in 2012 to become the world's largest smartphone market by volume. Smartphone shipments to China in the third-quarter of 2012 hit a record 60 million.

    Apple has noticed this shift. In fact, Apple CEO Tim Cook recently told Chinese-run Xinhua News Agency that he believes China will become the company's biggest market in the future.

    But for now, it's the domestic brands that have won.

    "Chinese brands have taken more than half the Chinese smartphone market this year, and they will take much more," Sandy Shen, the head of consumer research at technology research company Gartner in Shanghai, told the Financial Times.

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  • With Apple Stock at the iPhone's Mercy, Time to Play Defense Company Apple logo

    We hear one tidbit of bad news about Apple Inc. (Nasdaq: AAPL) cutting orders for iPhone 5 components and - boom! - Apple stock drops more than 6%.

    The reason for the stark cause-and-effect on Apple stock is that the iPhone contributes about 53% of Apple's vast revenue. [In fact, were the iPhone a standalone company, it would rank 29th in the Fortune 500.]

    This latest Apple bombshell broke late Sunday.

    According to reports from Nikkei and The Wall Street Journal, Apple supposedly cut orders for several key iPhone 5 parts for the first quarter. The Cupertino, CA company's orders for iPhone 5 screens, in particular, were reportedly slashed in half.

    That was immediately interpreted as a response to lower-than-anticipated iPhone 5 sales, which in turn raised alarms that Apple could be headed for more earnings disappointments, hence the selloff.

    Apple followers have questioned the validity of the story. Some bloggers pointed out that the number of iPhone 5 screens that Nikkei said Apple ordered had to be false in that it was far beyond any realistic estimate of iPhone sales for the current quarter.

    But whether there's anything to the report or not, its impact on Apple stock has been real.

    In the immediate wake of the story, several analysts cut their ratings and price targets. In less than two trading days, AAPL has lost $30 billion of market capitalization - the equivalent of Lockheed Martin Corp.'s (NYSE: LMT) entire market cap.

    Apple is now paying the price for having one of the most profitable consumer products in history.

    iPhone Becomes Vulnerability for Apple Stock

    On the way up, the iPhone made Apple the most valuable company on the planet.

    But now that iPhone sales growth seems to be leveling off, the overdependence that such success created has become vulnerability, at least as far as Apple stock is concerned.

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  • With Apple Stock Falling, Be Sure You Do This (Nasdaq: AAPL) If Sir Isaac Newton were alive today he wouldn't have to sit under a tree to get knocked senseless by an errant fruit - with Apple stock falling, rising, then falling again, just being an Apple investor would do the trick.

    Apple Inc. (Nasdaq: AAPL) stock started the year at $411, itself a 27% increase over the course of 2011. The stock rocketed to $626 in April, fell to $530 in May before zooming up to $702 in September.

    And then it really got crazy.

    Apple stock started falling, taking a rocky slide down to an intraday low of $505 on Nov. 16. Two weeks later, AAPL was back over $590 and threatening to cross the $600 threshold.

    Until this week, when Apple stock went falling yet again. On Tuesday AAPL dropped $10 a share (about 1.7%), then Wednesday nosedived another $37.05, or 6.4%, to close at $538.79.

    Apple stock today (Thursday) opened in negative territory, slipping quickly down to $518.63. Then it suddenly reversed sharply upward, reaching $550 by noon.

    Analysts were left scratching their heads.

    "Apple stock is significantly more volatile than its earnings and innovation stream," Daniel Ernst, analyst with Hudson Square Research, told Reuters. "And yet the wind blows slightly from the south instead of the east one particular morning, and the stock is down 6%."

    "It makes no sense. There are lines around the block for their products all around the world," Ernst added. "No other company has that."

    Why Apple Stock is Falling

    Theories abound as to why Apple stock is falling.

    This week's move most likely was triggered when AAPL stock made a "death cross" - that is, the 50-day moving average dropped below the 200-day moving average, typically a bad sign for a stock.

    But there are a few other factors that could have turned off investors:

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  • The Apple Stock Drop: What You Need to Know (Nasdaq: AAPL) As Apple Inc. (Nasdaq: AAPL) stock continues its seven-week tumble, investors want to know what is likely to happen next.

    Since hitting an all-time high of $702.10 on Sept. 19, Apple stock plunged $155.04 --more than 22% to close at $547.06 on Friday.

    Investors have gotten little help from Wall Street analysts, who have offered diametrically opposed opinions on where AAPL is headed.

    Among the prominent bears is Doubleline Capital CEO Jeff Gundlach, who predicted on Thursday that Apple stock would continue all the way down to $425. He said that's about where AAPL was when it started its dramatic climb in January, and he expects it to return to those levels.

    Gundlach is down on Apple because he thinks the Cupertino, CA-based company's new products are no longer cutting edge.

    "I'm really struck by this mini iPad thing as if that's any kind of a product innovation," Gundlach told CNBC."Once you just start changing the size of your products, I really think you're not exactly innovating."

    Meanwhile, some Apple bulls insisted the stock will not only bounce back, but eventually will reach beyond $1,000 a share.

    Brian White, an analyst with Topeka Capital Markets, said in a note to clients on Thursday that he's keeping his $1,111 price target on AAPL.

    "We believe that those investors that have missed the Apple rally over the past year are presented with a very attractive entry point heading into the strong holiday news season," White wrote.

    So which story are Apple investors to believe?

    To figure that out, let's take a closer look at what's been going on.

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  • How Apple Inc. (Nasdaq: AAPL) Became the Vampire Squid of Tech Business partnerships with Apple Inc. (Nasdaq: AAPL) produce abundant profits - but usually only for Apple.

    Using its clout as a vendor of highly desirable consumer technology, Apple secures extremely favorable deals with suppliers, providers of goods and services, and retailers.

    Such deals are a major reason behind Apple's extraordinary profits.

    "Can Apple continue to roll through industry after industry, soak up all the profits, and leave everything it touches as a smoking wreckage?" Craig Moffett, an analyst at Sanford Bernstein & Co. told the Los Angeles Times.

    Despite increases in business volume, many companies that deal with the Cupertino, CA-company discover it's usually a one-sided relationship when it comes to profits.

    Apple has, in effect, become the technology world's "vampire squid" -- a term coined by Rolling Stone Matt Taibbi in 2009 to describe Wall Street behemoth Goldman Sachs (NYSE: GS).

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