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How to Profit From Wall Street's Biggest Gaffe in Decades

I was perusing the newswires a few weeks ago when the following Reuters news story headline all but physically grabbed my attention.

It stated: “Exclusive: Morgan Stanley Rebuilds in Commodities Trading.”

Most folks probably looked at this and tossed it off as just another of the endless machinations of Wall Street.

But I knew better…

  • Google (Nasdaq: GOOG) Stock Slumps – But Outlook Still Bright

    Google Inc. (Nasdaq; GOOG) stock plunged after its earnings report missed estimates.

    Thursday after the close, Google's posted Q2 profit of $9.71 billion, or $9.54 a share, up 19% from $8.54 billion, or $8.42 a share, in the same quarter a year earlier. Revenue rose to $11.1 billion from $9.61 billion.

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  • Google Glasses Prove the Future is Already Here Getting a truly modern outlook requires a little help.

    Fortunately, you may soon be able to buy a unique pair of eyeglasses that do the job for you.

    In early April, Google Inc. (Nasdaq: GOOG) unveiled a stylish pair of Web-connected spectacles that serve as a computer you wear on your face (or perhaps a smartphone for your eyes).

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  • 3D Printing: How "Desktop Factories" Will Create the Next $1 Trillion Industry Don't worry if you've never heard of 3D printing. It's so new it's not on many radar screens yet.

    But soon everyone will know about it.

    Still in its very early stages, 3D printing is destined to have a huge impact on the entire world economy.

    These "desktop factories" will one day become a $1 trillion industry-completely changing the traditional factory model forever.

    It's what's known as a "disruptive technology."

    Here's why...

    By the end of this decade, everyone from consumers to big businesses to solo inventors will be able to make their own unique products in just a couple of hours.

    Need a special tool?... Or a new spare part?

    Soon you will be able to fire up the 3D printer and make one from composite materials.

    Indeed, I recently watched a YouTube video of Z Corp. making an adjustable wrench from high-tech compounds. It was a copy made from metal.

    Though it weighed less than the original, the "printed" wrench worked just as well and looked every bit as strong.

    And let's not gloss over the medical products that can be created by these revolutionary printers. An 83-year-old woman in Europe recently received a new jaw doctors printed with titanium powder.

    Medical team members said they made the implant in just a few hours compared with the several days usually required with existing methods.

    That's why I say this technology symbolizes the Era of Radical Change. Now, anyone who knows computer basics can make or invent products on the fly.

    3D Printing: A New Wave of Innovation

    Technically, you don't really "print" a new product, though the process is similar. Rather than putting ink on paper, the system creates the product by adding thin layers of special polymers and some metals.

    This is literally "cutting edge" high tech that is destined to become big business.

    I believe it is the 21st century equivalent of the laser printer and the dawn of desktop publishing in the 1980s that changed the entire print industry.

    But don't take my word for it...

    Let's hear from Hewlett-Packard (NYSE: HPQ), the high-tech giant that knows both types of printers extremely well.

    The Silicon Valley leader now offers a high-end unit made for professional use. Its DesignJet Color 3D printer reportedly sells for $20,000.

    But consider this: 3D printing will soon come to the masses at prices they can afford.

    Today, MakerBot sells its Replicator for $1,749. Its users can download free modeling software such as TinkerCAD or Sketchup from Google Inc. (NASDAQ: GOOG) to print their own products.

    Small-cap leader 3D Systems (NYSE: DDD) also recently launched the Cube, a competing device that lists for $1,299. A related website, Cubify.com, combines the simplicity of a coloring book with robust digital resources.

    The firm's CEO, Abraham N. Reichental, told BBC news that 3D Systems already has 1,000 workers -- and nearly as many patents.

    Now just think of what will happen when the price of these machines drops to $500....

    We're talking mass customization of a wide range of goods, from forks to jewelry to high-tech ski helmets.

    When this happens, 3D printing will undoubtedly unleash a whole new wave of innovation.

    And for a very simple reason...

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  • Android@Home, Project X, and Other Secrets of Google Inc. (Nasdaq: GOOG) Lately, Google Inc.'s (Nasdaq: GOOG) Mountain View, CA-based headquarters have looked more like the clandestine lair of a Bond villain than a business center.

    The company has poured more than $120 million dollars into construction projects that are fit to house testing labs and top-secret initiatives with names like "Project X."

    One theory about what's going on at the Googleplex involves the development of a driverless car.

    And that may well be true - but the more immediate and practical use for the renovation would be to expand the base from which the company competes with rival Apple Inc. (Nasdaq: AAPL).

    Google's war with Apple continues to escalate as the two companies fight for ground in three major consumer markets: mobile devices, Internet search and digital media.

    Google fired its first salvo at Apple with the introduction of its Android operating system, which has come to dominate the smartphone market.

    Apple recently retaliated by introducing Siri - the voice-activated search engine that has been a major selling point for the latest iPhone.

    Still, the biggest clash is set to take place in your living room.

    Google and Apple are fighting to be the company that supplies your media at home, stores it for you in a cloud drive, and then distributes it to your wireless devices.

    Google has even expressed interest in bringing other appliances into the fold, connecting things like lighting, heating, and air conditioning via the Android operating system - a seamless integration dubbed "Android@Home."

    The goal is to let you control every electronic device in your home through a smartphone or tablet.

    This is a battle for what futurists call the "digital living room."

    And it's just getting started. Here's a sneak peak at what's in store.

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  • We Told You So: S&P Does an About-Face on its Call to "Sell Google" Apparently it's not time to "Sell Google" after all.

    When Standard & Poor's Equity Research downgraded the shares of Google Inc. (Nasdaq: GOOG) from "Buy" to "Sell" last week - and slashed its target price for Google shares from $700 to $500 - we were blunt in stating that the ratings agency had blown the call.

    Looks like S&P must've heard us.

    On Monday, just three days after downgrading Google, S&P did an almost-total about-face on its much-debated call - and upgraded Google shares from "Sell" to "Hold." Frankly, these ratings firms seem determined to operate in a flawed manner - the S&P/"Sell Google" saga only underscores what we've been saying since 2007, when Money Morning warned readers that these firms failed to warn us about the subprime-mortgage disaster. (Don't forget, it was another unit of S&P that downgraded U.S. debt earlier this month. That downgrade, to be really credible, should have been announced several years ago, during the height of the global financial crisis.)

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  • By Downgrading Google Inc. (Nasdaq: GOOG), S&P Gets it Wrong – Again Standard & Poor's Equity Research downgraded the shares of Google Inc. (Nasdaq: GOOG) from "Buy" to "Sell," saying the merger with Motorola Mobility Holdings Inc. (NYSE: MMI) will likely "negatively impact" Google's growth.

    S&P also cut its target price for Google shares to $500 from its earlier target of $700.

    Needless to say, we think S&P got it wrong - again. (Don't forget, it was another unit of S&P that downgraded U.S. debt earlier this month. That downgrade, to be really credible, should have been announced several years ago, during the height of the global financial crisis.) Read More...
  • The Google-Motorola Deal: Winners and Losers Every tech company with a stake in mobile computing will feel the ramifications of Google Inc.'s (Nasdaq: GOOG) plan to buy Motorola Mobility Holdings Inc. (NYSE: MMI) for $12.5 billion.

    Google partners could well become rivals, while the other major players in the mobile computing arena, such as Apple Inc. (Nasdaq: AAPL), Microsoft Corp. (Nasdaq: MSFT) and Research in Motion (Nasdaq: RIMM) all will be affected - some negatively, but some positively.

    The new partnership also could inspire other merger and acquisition activity in the sector, between large, cash-rich companies and small, struggling ones.

    Let's take a look at how the Google-Motorola deal, which was announced on Monday, will alter the mobile computing landscape, company by company:

    Google: A Mixed Bag

    Primarily, Google bought Motorola to acquire its vast patent portfolio to better defend its mobile operating system, Android, from a rising number of patent lawsuits.

    "Motorola has a strong patent portfolio which will help protect Android from anti-competitive threats from Microsoft, Apple and other companies," Google CEO Larry Page said in Monday's conference call.

    Although most of the lawsuits have been aimed at handset makers such as HTC Corp. (OTC: HTCXF), Samsung Electronics LTD (PINK: SSNLF), and Motorola, the common thread was Android. Microsoft focused on collecting licensing fees for each handset, while Apple's strategy was to halt the sale of devices competing with its own iPhone and iPad products.

    The typical defense to patent lawsuits is another patent lawsuit, but you need to possess a broad portfolio to do that. Google, which had a mere 700 patents before, will add Motorola's 24,000 patents to its arsenal.

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  • Why It's Time to Buy Google Inc. (Nasdaq: GOOG) By announcing its plans to buy Motorola Mobility Holdings Inc. (NYSE: MMI) yesterday (Monday), Google Inc. (Nasdaq: GOOG) is forcing me to make a statement that I never thought I would make: It's time to buy Google.

    The $12.5 billion deal will see Google acquire the phone-making half of the Motorola Inc. spin-off that took effect in January. Google is paying $40 a share in cash - about a 63% premium to Motorola Mobility's closing price on Friday. The deal - which Google says will help it "supercharge" its Android smartphone business - will close late this year or early in 2012.

    I used to look at Google as the next Microsoft Corp. (Nasdaq: MSFT). But Google has achieved a status that Microsoft shot for - and missed: It's become an online leader and a factor in the everyday life of consumers. Google also has massive growth potential available, and hasn't quit trying to grow.

    And that's a good reason - perhaps the best reason - to own Google today and into the future.

    Google's purchase of Motorola Mobility will showcase this potential. It positions Google to pair Motorola smartphones with its Android software and compete against iPhone-maker Apple Inc. (Nasdaq: AAPL).

    However, Google's new purchase does a lot more than dangle a bigger slice of smartphone market share - and this reason is why I finally decided Google is a "Buy." (**).

    Motorola Mobility: All About the Patents

    The game-changing benefit for Google in the Motorola Mobility deal is the intellectual property Google is picking up. We are talking about 17,000 patents in this purchase.

    A stronger patent portfolio allows Google to reduce royalty costs by using cross-licensing agreements with handset makers. And it protects the Android smartphone market from getting slammed with patent fees (and lawsuits) as sales continue to climb.

    The number of Android-software-powered phones jumped 300% last quarter.

    Motorola Mobility's patent portfolio will enable Google to move to hardware design for its Android phones. That will give Google both the phone operating system and the intellectual property to act as a gatekeeper in the mobile space.

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