Investing

What Higher Apple Dividend Means for Investors

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I’m a huge fan of higher dividends. I’m less of a fan of share buybacks, but let’s get there in a minute. Apple Raises Dividend Theoretically, owning a stock means owning a part, or share, of a company. However, if you really break it down, being a shareholder means virtually nothing anymore. For example, in business classes around the country they will tell you that as a shareholder, one of your rights of ownership is voting for the company’s Board of Directors. That’s technically true, but these days, that means nothing. Only a certain number of seats are up for election at one time. Only the candidates that the company’s current management wants are on the ballot. In other words, even if you owned 51% of a company’s stock, your ability to vote would take years to actually affect the company. Your actual avenue for affecting any sort of change is the courts. If you don’t get to “own” the company, then what is your stock actually worth? Well, it is an item of limited supply that others believe have value. It’s the same way U.S. currency works, or Bitcoin. The exception is when a company pays a dividend. Then, …

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Do Young People Invest in the Stock Market?

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Do Millenials Have Money To Invest? A recent Bankrate survey shows that just 26 percent of Millenials say they own any stock. That sounds about right to me. As a former financial advisor, I never conducted any official, statistically valid surveys, of course, but I did talk to a lot of people, many of them younger. Younger people, like Millenials, almost never became my clients. The feeling was mutual. You see, most younger people don’t HAVE any money, even if they are currently making it. If you graduate from college at say 22, and you get a job paying $75,000 per year, then you are doing pretty well. But, you may have student loans; you probably would like to buy a house; you might be getting married and saving for a wedding. Of course, you might also be enjoying your freedom and taking trips, buying cars, and so on. The thing is, even if you were saving 10 percent of your income that still means you only have $7,500 of investable assets after a year. $15,000 the next, and so on and so on. By the time you had even the minimum of $100,000 that makes it worth even a …

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Is The Tech Bubble Worse than 2000?

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Mark Cuban made his fortune (well, his second bigger fortune) during the first tech bubble (some call it the internet bubble) when he sold Broadcast.com to Yahoo for $5.4 billion in stock. The real financial genius of Mark Cuban turned out to be not so much in the founding and selling Broadcast.com, but in quickly and effectively diversifying his investments (including all that Yahoo stock) before the bottom fell out of the internet bubble. Is 2015 a Tech Bubble? There have been a lot of people wondering for a few years now if technology is once again in a bubble. You’ve seen the big headlines, of course. Facebook bought Instagram for a billion dollars. Yahoo paid over a billion dollars for Tumblr (even though the company was probably quickly running out of money). These days, having a zero revenue company purchased for a billion dollars is commonplace. The idea is that somehow, someway, those users are worth money, even if the current company has no idea, or even plans, to make any revenue off of them. In many ways, this is like the stock market bubble that built up in the late 1990s, when any website was considered a good …

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Why Cheaper Oil Hurts Stocks

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There is a lot of new lately about lower oil prices hurting the stock market. This comes as a shock to casual investors who are used to HIGHER oil prices hurting the stock market. If lower oil prices are good for consumers, and the consumer drives the American economy, then why would lower oil prices hurt stocks? Short-Term Stock Price Movements First, never forget that short-term stock price movements are much more about speculators maneuvering for quick profits than about the actual value or prospects of the stocks in question. One way to calculate a company’s value is it’s market capitalization which is the number of shares outstanding the company has times the company’s share price.  As I write this, for example, IBM has a market capitalization of $154.76 billion dollars. However, it’s stock is down approximately $3 per share from yesterday. That means that, theoretically, the company was worth $157.85 billion dollars yesterday. No matter what the price of oil is, there is no way that anything changed enough to make IBM worth $3 billion dollars less than yesterday. Short-term price fluctuations are the result of supply and demand. And, since a large majority of daily trades are actually between computers, …

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What Do Stock Market Records Mean?

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Both the Dow Jones Industrial Average and the S&P 500 closed at all-time highs on Friday. It seems that every week brings new record-breaking highs for the Dow and the SP500. The question is, what do all of these record highs mean. Should an average investor do anything when the stock market hits a new record? What Is a Stock Market Record High? Let’s start with the basics. While individual stocks on the stock market are going up and down based on their own merit, and supply and demand, the stock market is often reported as a single thing. What financial reporters and analysts mean when they say “the stock market,” is one of the indexes of the markets. There are numerous indexes, but the most widely touted are the Dow Jones Industrial Average and the Standard and Poors 500 index. When people say the stock market broke a record high, they mean that one (or both) of those indexes is higher than it has ever been. (You can’t invest directly in the indexes, which are just academic, mathematical statistics, but you can get close using index funds.) In a way, higher records are inevitable. Even if the intrinsic value …

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Apple iPhone 6 Stock Update

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The real information about the possible impact on Apple stock from the iPhone 6 and iPhone 6 plus is in last week’s article, but since Apple released some new data, I’ll do a little update here. In particular, I’m going to a take a look at how some of what is “out there” applies to the things we wanted to watch for to see what, if any, impact the new iPhones have Apple stock. If this doesn’t make sense, it’s because you didn’t read the earlier article about whether now is a good time to invest in Apple stock. Go ahead, click the link, read it, and then hit the back button. We aren’t going anywhere 🙂 The original “Apple Event” where the new iPhones, Apple Watch, and Pay Now were announced was September 9th. iPhone Supply – So, we talked about sales of the iPhone. There wasn’t anybody who thought that Apple would sell anything less that “millions” of iPhone 6 and iPhone 6 Plus. The company released data showing just that on Monday. So, how is the supply of iPhones working out? There’s conservative, there’s underestimated, and there’s artificially creating an iPhone shortage. Which one is is? Apple …

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iPhone 6 and Apple Stock

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I wasn’t going to write this post, but I’ve gotten just enough emails and messages on the subject of what the new iPhone 6 and iPhone 6 Plus means for Apple stock that I thought I’d post some quick thoughts for readers here. First, the old saying in investing is to buy the rumor and sell the news. As with all Wall Street wisdom, this is a gross oversimplification and only partially true. However, consider that the time to buy the POTENTIAL of the new iPhone and Apple Watch was BEFORE the big event. The risk, of course, was that if the information was disappointing, the stock would have likely taken a  downturn. As it was, people, and analysts, seemed pleased with what they saw, and the stock has already reacted positively. What this means, is that if you wanted to invest for the short-term based on the fact that felt Apple’s new technology would be good, you are too late. Now, if you are looking to invest in Apple NOW, for the short-term, your investment will depend on: a) How well the products are received by the real consumer. – Potential risks here involve a new “antenna-gate” type of …

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Microsoft Layoffs About Nokia and New CEO

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Microsoft recently announced a big round of layoffs. According to reports, this is Microsoft’s biggest round of layoffs ever, at nearly 18,000 employees, all within the next year. Often, layoffs are all about Wall Street, rather than the company itself. Cutting jobs shows you are serious about cutting costs, which investors seem to care about more than the admission that your company no longer produces the products or revenues to fully use your workforce. In this case, the motivation is different. New Microsoft CEO Stamps Microsoft has a new CEO after years under Bill Gates replacement Steve Ballmer. The company, which still generates plenty of revenue and profit, is frequently criticized for not growing more, for “losing” its dominant position, and for missing out on big technology shifts, primarily mobile technology. When Ballmer stepped down, nothing was more important than the next CEO making big, drastic moves to “right the ship.” New Microsoft CEO Satya Nadella is doing just that. First, there was a company-wide memo (gladly made public) about how Microsoft would make be making major shifts in its focus and in how it develops, markets, and sells products. Next up, Nadella is “proving” he is serious about changes by …

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Investing Scams Newsletters

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Scamming investors is a very old practice. Way before a centralized stock market institutionalized the dreams of investors looking to get rich, there were unsavory tricksters looking to pray on those dreams. Are Investing Newsletters Scams? Not all newsletters are scams. However, it is important to remember that even legitimate newsletters seldom have a solid, long-term, track record of beating the market. The statistics and returns are often carefully calculated in the just the right way as to show the newsletter in the best possible light. For example, a newsletter may only report it’s “best picks” returns. This allows a retroactive look at what the “best picks” were. For newsletters that are scams, there are some useful ways to spot them. Other FinanceGourmet articles on finance schemes: Credit Karma Is a Scam? Is Quizzle a Scam Is Credit Sesame Safe? FAFSA.com scam First, a legitimate newsletter won’t promise the sun and the moon, especially, after you have subscribed to it. Companies frequently boast a little big when they are advertising to new customers. However, once you buy that new car, the manufacturer doesn’t include a section in the owner’s manual about how to beat a fighter jet in a drag …

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Apple Earnings Dividends and Stock Split

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Apple is one of those companies that draws more than its fair share of attention. There are both the so-called fanboys, and plenty of haters out there to talk at high volume whenever the company does anything. However, the company is also a key component of the S&P 500 and most NASDAQ indexes. In other words, what Apple does as a publicly traded company matters to your personal finance. Apple 2014 Q2 Earnings You’ve probably seen the news by now. Apple had what many analysts are calling a blockbuster quarter. In particular, analysts were surprised by the increase in Apple’s revenue for the quarter. In a way, this is just further proof that analysts don’t really have any sort of crystal ball that regular investors don’t. Apple long ago stopped giving guidance to Wall Street. Without that guidance, Wall Street really doesn’t have a clue how things are going for Apple beyond what things like channel checks can tell them. If you want to read about Apple’s second quarter earnings, there are several reasources including Marketwatch, and Apple’s investor relations website. However, for long-term investors in Apple stock, the quarterly earnings are not the story. What is the story is …

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