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Sharpen Your Pencil – And Put These Three Stocks on Your "Shopping List"

Ask any of our gurus for advice on how to survive a stock-market sell-off – or even a whipsaw period like the one we’re navigating now – and you’ll get a surprising answer.

Keep a shopping list ready, they’ll tell you…

  • Featured Story

    The Antitrust Curse: What Apple (NASDAQ: AAPL) Can Learn From Microsoft, IBM

    On the surface, it would appear that Apple Inc. (NASDAQ: AAPL) has little to fear from the antitrust lawsuit filed by the U.S. Department of Justice last week.

    The DOJ accused Apple of colluding with several major publishers to fix the prices of electronic books in its iBookstore.

    The evidence was strong enough that three of the five book publishers settled before the DOJ filed the suit. Two, Macmillan and the Pearson PLC (NYSE ADR: PSO) Penguin Group, decided to fight the charges along with Apple.

    The antitrust case itself poses little threat to Apple. With $100 billion in the bank, it can afford to fight government lawyers until doomsday.

    Even losing the case wouldn't make much of a dent in Apple's pocketbook. The three publishers that settled paid a combined $51 million, hardly a concern to a company that earns an average of $120 million every day in profits.

    Likewise, a remedy that forces Apple to lower prices for e-books in its iBookstore would have almost no impact on earnings. Nearly all of Apple's profits come from sales of high-margin hardware like the iPhone and iPad. Profits from all iTunes Store segments, which include the far more voluminous sales of apps and music, account for less than 4% of Apple's profits.

    And yet this antitrust suit poses the biggest threat Apple has faced in years, as former tech kings Microsoft Corp. (NASDAQ: MSFT) and International Business Machines Corp. (NYSE: IBM) can attest.

    "This echoes back to the peak in Microsoft," Sean Udall, author of Minyanville's TechStrat Report, said in a Yahoo! Finance interview. "Microsoft had a monopoly and was doing great and was the star tech stock of yesteryear. And you can almost draw the peak of their stock when they had major DOJ issues."

    The problem with being in the DOJ's gunsight is that it distracts management, makes the company hesitant to innovate, and blemishes the company's public image.

    While antitrust woes may not have been entirely responsible for Microsoft and IBM ceding their dominant positions in tech, they were clearly a major factor.

    And worse for Apple, the e-book case could be just the beginning.

    To continue reading, please click here... Read More...
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  • Is Apple Stock (Nasdaq: AAPL) the Short of a Lifetime or the New Widow Maker? I have a confession to make.

    I believe Apple stock (Nasdaq: AAPL) is going to be world's first trillion-dollar company yet I want to short the snot out of it.

    Am I being compulsive?...impulsive?....or foolish?

    Perhaps it is all three considering that Apple has risen more than 3,000% in the last ten years, turning almost any attempt to go against the grain into a "widow maker" trade.

    I say almost because I am one of the lucky ones.

    A few weeks ago I recommended my Strike Force subscribers purchase put options on Apple, effectively shorting the stock. That resulted in a 47% profit in less than 24 hours for anyone who followed along, excluding fees and commissions.

    I'm not alone in my thinking.

    Uber investor Doug Kass, general partner of Seabreeze Partners Long/Short LP and Seabreeze Partners Long/Short Offshore LP, tweeted recently that he had covered "half his short" on Apple following the announcement of their dividend and buyback plan.

    Given that the stock had run up to nearly $608 a share before the announcement, presumably Kass had banked some gains, too.

    To continue reading, please click here... Read More...
  • How to Earn a 9.25% Gain in 30 days While Waiting for Apple's
    (Nasdaq: AAPL) Dividend
    Although it's been one of the market's darlings for a decade now, dividend-oriented investors have long shunned computer giant Apple Inc. (Nasdaq: AAPL) because, well ... it didn't pay one.

    That, coupled with AAPL's historically high share price, has always kept me from buying Apple stock - but, as a trader, it hasn't kept me from generating income with Apple options.

    Last week, the cash-rich company finally took a step toward rewarding loyal shareholders by declaring a dividend - a quarterly payout of $2.65 a share, beginning with the fiscal fourth quarter, which runs from July 1 to Sept. 30, 2012.

    Assuming the payouts continue, which they almost certainly will, that means Apple's annual dividend in fiscal 2013 will be $10.60 a share, which sounds fairly rich - except for one thing...

    At its closing price of $599.34 last Thursday, Apple remains one of the market's highest-priced stocks, meaning the new annual dividend of $10.60 will equate to a yield of only 1.76%.

    That's decent, but it's hardly near the top of the income-stock ranks. Plus, it'll be well over a year before you can collect the full dividend.

    Fortunately, by using options, you can easily generate some significant income while waiting for Apple's new dividend to kick in - and multiply your yield at the same time.

    Let me explain...

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  • Why Apple Stock Is Headed for $500 – And Beyond Even with the product lineup it has now, Apple Inc. (Nasdaq: AAPL) stock has enough fuel in the tank to propel it to at least $500 a share.

    But it's about to add a booster rocket.

    According to several analysts, Apple is working on a TV-set device that could disrupt the TV set industry much as its other devices have done in their industries.

    This new device - to simplify, let's call it the "iTV" - is not to be confused with the existing Apple TV, a set-top box that allows users to access digital content from the Internet on their televisions.

    We're talking about a full-fledged television, albeit one with Apple's special touch. And that is what will push Apple stock even further skyward.

    In a note to clients last week, Piper Jaffray analyst Gene Munster made a case that Apple is already building the iTV, which he expects could add billions of dollars to the Cupertino, CA company's top line.

    "We believe that of the estimated 220 million flat panel TVs sold in 2012, 48% or 106 million units will be internet-connected, of which Apple could sell 1.4 million units," Munster wrote. "We believe an Apple Television could add $2.5 billion or 2% to revenue in 2012, $4.0 billion or 3% in 2013 and $6.0 billion in 2014."

    Munster said he had met with Asian component suppliers that said they knew of prototypes of the new Apple device, and that the company had filed several patents for television interfaces.

    But the definitive piece of evidence is a quote from Steve Jobs biographer Walter Isaacson's just-released book in which Jobs makes it clear that an iTV was the company's next major project.

    "I'd like to create an integrated television set that is completely easy to use," Jobs said. "It would be seamlessly synced with all of your devices and with iCloud. It will have the simplest user interface you could imagine. I finally cracked it."

    That "simplest user interface" is the key to why an iTV would be such a game-changer.

    Tomorrow's TV

    The iTV will not use a remote of any kind. It will be voice-controlled, using the same Siri technology Apple introduced earlier this month with the iPhone 4S.

    "It's the stuff of science fiction," writes Nick Bilton in The New York Times. "You sit on your couch and rather than fumble with several remotes or use hand gestures, you simply talk: "Put on the last episode of Gossip Girl.' "Play the local news headlines.' "Play some Coldplay musicvideos.' Siri does the rest."

    The iTV was waiting for Siri - technology that allows people to simply tell their television what they want to watch, whether it comes from the Internet or from a programming provider like Comcast Corp. (Nasdaq: CMCSA) or DIRECTV (Nasdaq: DTV).

    To continue reading, please click here...

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  • Don't Worry: Apple Stock Will Bounce Back Suddenly, Apple Inc. (Nasdaq: AAPL) appears mortal.

    With Apple stock falling 5.59% yesterday (Wednesday) to close at $398.62 following an uncharacteristic earnings miss Tuesday, the company has lost its aura of invincibility.

    Apple delivered $7.03 a share on $28.27 billion in revenue but analysts had expected earnings of $7.28 a share on revenue of $29.45 billion.

    "The implications of an Apple miss means more than is typical, given the importance of its auraof brilliance in sustaining premium price points and product loyalty," Alex Gauna of JMP Securities wrote in a research note. "This will likely also add to well-placed investor anxiety around how the company sustains its momentum under new leadership."

    The earnings disappointment - Apple's first since the second quarter of 2002 - was just one of several recent bruises suffered by the Cupertino, CA-based tech giant.

    Concern started brewing in August when Steve Jobs resigned as CEO, but Jobs' death from pancreatic cancer earlier this month seemed to rob Apple of some of its magic.

    Then the Oct. 4 introduction of the iPhone 4S was met with disappointment because it wasn't the much-rumored iPhone 5.

    The series of stumbles has Apple investors wondering whether their days of huge gains are over. But the emotional reaction to Apple's earnings is a mistake.

    "While the Q4 miss - following management transition - may restrain near-term investor sentiment, we think the new management team should be given its opportunity to show what it can do," RBC Wealth Management analyst Mike Abramsky said in a research note.

    Abramsky also pointed out several strengths that show why abandoning Apple stock now would be premature: "Apple's key franchises (iPad, iPhone) remain early and underpenetrated, with significant growth drivers (4G, China, emerging markets, enterprise, etc.) ahead," he said.

    In fact, a comprehensive look at the company's fundamentals as well as its prospects shows that there's still tremendous potential for growth.

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  • Goodbye, Steve Jobs: "Leave of Absence" Could Drop Apple Stock 50% Steve Jobs is sick, again. And his latest "leave of absence" from Apple could drop the stock more than 50%.

    During Jobs' last illness, Apple stock plummeted from $176 to $83. Could it do the same again? Or is Apple strong enough to survive without its creator?

    Steve Jobs runs the most valuable technology company in the world. Its market cap exceeds its nearest competitor, Microsoft, by more than $70 billion. And its 2011 earnings are setting new records, despite continuing economic trouble in its largest markets.

    But Steve Jobs' latest absence has investors wondering whether the company's innovation and... Read More...
  • Apple Inc. (Nasdaq: AAPL) Without CEO Steve Jobs Shakes Some Investors' Confidence This isn't the first time Apple Inc. (Nasdaq: AAPL) Chief Executive Steve Jobs has given investors a scare.

    And each time before, Apple has navigated the crisis – and soared to even greater heights.

    Will that pattern repeat itself again? Or has Apple's fortunes soured this time around?

    Read More...