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Tech's "Virtuous Cycle" Trend Will Give Us Profits for Years

technology

My wife Robin is a financial advisor and a CPA.

She also possesses one of the sharpest minds I've ever seen.

That's probably why she has such an affinity for jigsaw puzzles. Back in upstate New York, when we were both attending business school together at night, there was nothing she liked more to "decompress" during the lull between the semesters than to do a jigsaw puzzle.

And the greater the number of pieces - and the more complex the puzzle - the more she liked it.

Truth be told, I view the investing process in much the same way that my wife looks at jigsaw puzzles.

There's something really gratifying about taking hundreds of disparate "pieces" - in this case, the reams of financial, economic, and political data that's available at any given time - and shrewdly assembling them into a "picture" that makes sense or conveys beauty.

Or that points the way to untold wealth...

You'll Be the Winner of This Blue Chip Battle

Blue Chip Even in the fast-paced world of high tech, 10 weeks is a short amount of time. And yet, as recently as early September, many industry analysts were saying Apple Inc. (Nasdaq: AAPL) had lost its innovative edge in the global smartphone war. That's when the Silicon Valley legend launched the iPhone 6 with two larger […]

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Amazon Local Register Faces New Competition in Mobile Payment Wars (Nasdaq: AMZN)

On Tuesday at its gala event, Apple (Nasdaq: AAPL) unveiled its mobile payment device, the "Apple Pay." It will compete with Amazon (Nasdaq: AMZN), which just launched its own swipe-to-pay device, the "Amazon Local Register," in August, and current market leader Square.

Here's a side-by-side comparison of how Local Register, Pay, and Square stack up...

Make (Big) Money in Any Market

So what if the market drops a little from time to time? That's inevitable, and in the long term, healthy.

The fact remains we're in a bull market. We have been since March 2009.

But now, especially with some early 2014 swings, investors may be wondering.

How long does this bull have to run and what should we do next?

I don't have a crystal ball... but I do have 30 years' experience - starting in 1982 on the floor of the Chicago Board Options Exchange, then running a big bank's hedge trading, then a Wall Street trading desk, and finally managing my own hedge funds.

I know many investors stick to a buy-and-hold strategy or more actively trade. There's a place for both to maximize this market.

But before you can start making money in the market, you need to know what's really happening...

Obama Brings the Stick to Apple-Samsung Patent War

Funny glasses

President Barack Obama added an unexpected twist to the patent wars when he took the extraordinarily rare step of vetoing the International Trade Commission's own trade sanctions against Apple Inc. (Nasdaq: AAPL) last week.

The trade commission had ruled that Apple violated some of Samsung Electronics Co. Ltd's patents, and the commission was set to ban outright several key Apple products, such as the iPhone 3GS, iPhone 4, and the iPad 2 and 3G models - all sold by AT&T Inc. (NYSE:T), among others.

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

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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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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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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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Forget Q4: Apple (Nasdaq: AAPL) Earnings Must Deliver in December

Even though Apple Inc.'s (Nasdaq: AAPL) earnings for Q4 aren't yet out - they'll be announced after Thursday's market close - the company is much more concerned with beating last year's spectacular December quarter, the company's fiscal first quarter.

Apple's Q1 earnings last year blew past all expectations. Apple earned $13.87 per share - more than doubling the profit from the year-earlier quarter -- by selling a record 37 million iPhones and 11 million iPads.

And Apple is going to need the profits from every gadget it can sell if it hopes to top that benchmark.

That's why all eyes were focused on the long-anticipated iPad Mini yesterday (Tuesday), but the real story was the avalanche of product updates unleashed just in time to supercharge for its critical December quarter.

In addition to the Apple iPad Mini, the special event in San Jose, CA, included the surprise announcement of the fourth generation iPad, a revamp of the iMac and Mac Mini desktops, and a the upgrade of the 13-inch MacBook Pro laptop to a high-res Retina display.

"We're not taking our foot off the gas," said Apple CEO Tim Cook.

When taken together with the iPhone 5 launch and the upgrades to the iPod Touch and iPod Nano just last month, it adds up to an uncharacteristic bunching of product updates.

It means lots of fresh Apple gear in stores for the holidays, historically the company's biggest quarter of the year.

Why Apple (Nasdaq: AAPL) Needs Great Q1 Earnings

In a sense, Apple has become a victim of its own success.

The explosive growth of Apple earnings, driven by the explosive growth of iPhone sales (and that product's huge profit margins), has made huge earnings increases routine.

But Apple knows the tough comparisons to year-ago quarters will get Wall Street's attention.

And as Apple's growth rate slows, so will the rise of the stock.

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Why Apple (Nasdaq: AAPL) Won't Ditch Controversial Foxconn

Apple Inc.'s (Nasdaq: AAPL) position as an iconic brand, as well as a Wall Street darling, doesn't mean its image stays squeaky clean.

The company suffered a PR headache this week when a worker riot broke out at one of the Chinese factories run by Foxconn, the company that assembles the majority of iPhones and iPads.

The riot, which involved about 2,000 workers, occurred late Sunday at a Foxconn factory in Taiyuan. Analysts attributed the riot at least in part to the same stressful working conditions that led to several suicides in 2010.

Complaints about long hours, low pay, and draconian management at Foxconn's many factories have persisted for years, and reflected negatively on the usually-lauded Apple.

Although Foxconn assembles devices for most of the world's top consumer electronics companies -- including Sony Corp. (NYSE ADR: SNY), Hewlett-Packard Company (NYSE: HPQ), Dell Inc. (Nasdaq: DELL), Cisco Systems Inc. (Nasdaq: CSCO), and Microsoft Corp. (Nasdaq: MSFT) -- whenever a worker crisis erupts, the focus is all on Apple.

The net result is that Apple - which just launched its biggest product of the year, the iPhone 5, this past weekend - gets tainted by association every time there's trouble at Foxconn.

Over the past several years, that's happened with increasing frequency.

"These workers must be treated with respect," New York-based watchdog group China Labor Watch said in a statement. "And both Apple and Foxconn, with billions of dollars in profits every year, have both a legal and ethical obligation to uphold the rights of these workers."

Clearly Apple would rather avoid these nasty surprises, but a complex combination of factors will keep it lashed to Foxconn for years to come.

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Apple iPhone 5 Demand Alone Will Push Stock Price Past $800

If the Apple iPhone 5 turns out to be the blockbuster product that nearly everyone expects, it should easily carry the company's stock to $800 and beyond.

The long-anticipated next-generation iPhone is expected to debut at an Apple Media Event Sept. 12 and go on sale Sept. 21.

Rumored improvements such as a bigger 4-inch screen and 4G LTE network compatibility have heightened consumer anticipation, even slowing sales of the current iPhone 4S.

A recent survey of more than 4,000 American consumers by ChangeWave Research indicated that many can't wait to give their money to Apple Inc. (Nasdaq: AAPL).

"Advance demand for the iPhone 5 is strikingly higher than we've seen for any previous iPhone model," Paul Carton, ChangeWave's vice president of research, told Computerworld.

In addition, extraordinarily positive guidance from several iPhone component suppliers hints that Apple has ramped up production like never before. Cirrus Logic (Nasdaq: CRUS) forecast a 70% sales increase for the current quarter. Omnivision (Nasdaq: OVTI) said it expected revenue to jump 38%-50%.

[ppopup id="70925"]Six ways you can make money as the masses flock to Apple for the iPhone 5. [/ppopup]

And with Apple's huge patent case victory over Samsung two weeks ago casting a cloud over the iPhone's Android-based competitors, conditions are ideal for a huge iPhone 5 launch.

In a note last month, Piper Jaffray analyst Gene Munster, predicted the Apple iPhone 5 would be "the largest consumer electronics product upgrade in history." He forecast the iPhone 5 will sell 6-10 million units within its first 10 days.

Another analyst, Horace Dediu of Asymco, has projected iPhone 5 sales of about 170 million units over the next year, which would beat first-year sales of the iPhone 4S by about 70%.

Given that the iPhone contributes more than half of Apple's profits, any large increase in iPhone sales will deliver a mammoth boost to the bottom line. And those rapidly rising profits will keep pushing AAPL higher.



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