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During the Depression-ridden 1930s, with the United States circling the financial abyss, an American industrialist named Thomas J. Watson Jr. gambled the future of his business-equipment company on an expansion plan that included wholesale hiring, investments in technology, and the construction of new factories.
For six years, Watson had his factories at full bore – churning out tabulating equipment there were no buyers for. But he believed in his plan and stayed with his strategy.
When the Social Security Act of 1935 came up for bid – billed as "the biggest accounting operation of all time" – Watson's company was the only firm able to supply the equipment needed to maintain the employment records of 26 million people.
The successful execution on this contract led to other government pacts. Not only did this allow Watson's company to navigate the Depression; it set it up for long-term success.
That company went on to become one of the most-successful computer firms in history – the venture we now know as International Business Machines Corp. (NYSE: IBM).
"Big Blue," as the company is also known, has been experiencing some tough problems in recent months. But its successful years made fortunes for many investors.
We believe investors can reap the same windfall from the company that's poised to replace IBM as the new king of the computer industry.
We've identified that successor – and it's one of the best stocks to buy in tech today.
IBM: From Leader to Laggard
Back on Jan. 21, IBM announced that fourth-quarter sales had fallen 5%.
That sounds like the kind of small decline that really shouldn't worry investors. After all, profits rose about 6% from the year-ago quarter to about $6.2 billion.
But this was the seventh straight quarter that revenue fell. And Big Blue said it was taking a $1 billion first-quarter hit to cover restructuring costs.
Even as IBM tries to make itself over – which it has successfully done before – another firm is poised to take its place at the head of the sector table.
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.