Welcome to “No Excuses” Investing!

by Jon Markman on March 28, 2014

John Markman

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with Jon Markman!

Since February, we’ve covered a lot of ground together.

For starters, I showed you how technology stocks are outperforming the average S&P 500 stock by an astonishing SIX to one in 2014.

I showed you how a remarkable 93% of the stocks in my current model portfolio are producing substantial gains — and that we’re seeing gains of 114% … 178% … 156% … 234% … as much as 305% — enough to quadruple your money.

In “Epic Profits Ahead!”
I showed you why I think it’s crazy
to let fear of a possible correction
deprive you of tremendous profit potential:

I wrote …

xxxxx
Adding a new approach to your stable of investments doesn’t have to take a lot of time each week.

“We’ve been through two world wars in Europe and one in Asia, two nuclear blasts, countless smaller wars, countless plagues, countless genocides, countless super-destructive hurricanes, tsunamis, and earthquakes, some of the worst political leadership imaginable, at least five serious bear markets, several market crashes, numerous recessions, a global depression, and yet, hey — we are still standing.

“… And stocks are up 10,000% from where they were in 1900 before all these terrible things happened.”

And I also I showed you what legendary fund manager Peter Lynch said about stock market fears:

“Your ultimate success or failure will depend on your ability to ignore the worries of the world long enough to allow your investments to succeed.

“It isn’t the head but the stomach that determines the fate of the stock picker.”

BOTTOM LINE: Since ignoring the threat of corrections — even from major world wars — could have made you 10,000% richer, doesn’t it just make sense to focus on potential profits instead of distant dangers?

In “Turning $25,000 into $12 Million”
I showed you why a decline in the dollar
would be very GOOD for tech stocks:

“A decline in the U.S. dollar,” I wrote ” — even a crash — could be one of the BEST things that could happen to tech stocks for two critical reasons:

“First, a decline in the U.S. dollar causes inflation; rising prices. And one of the first things to rise tends to be financial assets.

“Second, a falling dollar is actually one of the best things that could possibly happen to U.S. tech companies because it makes their products cheaper — and by definition, more competitive overseas.”

BOTTOM LINE: The lower the dollar goes, the better these companies — and these stocks look!

In “Is Bubblephobia costing you a fortune?”
I showed you why worrying about bubbles
could be the most expensive thing you could do:

I wrote …

“Bubbles are the single most important part of the investment cycle. They are all about optimism among investors and the public about the future of a technology or service.

“You need that kind of enthusiasm to build things that otherwise would never be built, like the transcontinental railway, the airplane, hundreds of thousands of miles of “dark fiber” in the 1990s and so on.”

And …

“When they [valuations] are high and rising, it’s a good thing. It means there’s still time to make money.

“But when valuations get insane — like just before the tech wreck when companies with no earnings were trading at up to 148 times book value — it’s time to take your profits off of the table.”

BOTTOM LINE: Obsessing over the possibility that a future bubble could burst is the best way to miss out on huge profits in the here-and-now!

In “Tech Stock Profits for Non-Geeks,”
I showed you why you don’t have
to become an expert on technology
to make a bundle on these new
technology superstars:

And I detailed the approach I use to find stocks that double, triple, even quadruple our money in the current environment …

That also leads me to stocks that are likely to do far better in the months ahead …

And that gives us 93% winners.

BOTTOM LINE: This is NOT rocket science — all you need is a prudent, common-sense approach like the one I’ve already given you!

In “The Poor Man’s Way to Riches,”
I showed you why you don’t need a lot of money
to go for huge profits:

I explained that I only paid about $32 for the average stock in our previous model portfolio.

Plus, I also pointed out that most of today’s biggest tech superstars started out life at under $30 per share …

And today, those stocks are up as much as 58,881% — $10,000 becomes nearly $6 million and $25,000 becomes nearly $15 million.

BOTTOM LINE: You do NOT need a lot of money to do this!

Now, of all the concerns I’ve heard from readers over the past few months, only one remains …

“I just don’t have the time
to get into technology investing now!”

I can relate. Believe me: We ALL can!

We live unbelievably hectic lives. Adding a new approach to your stable of investments could take a lot of time.

But it doesn’t have to — because I’ve got you covered.

Allow me to explain …

At 2:00 PM Eastern Time on Tuesday, April 8, I’m joining Dr. Weiss at the Money and Market studios for an historic first meeting.

At that meeting, I will NAME my favorite technology stocks to buy now.

I will also open enrollment for NEW TECH SUPERSTARS — my exciting new trading service for technology investors.

I can’t tell you much now — I do NOT want to spoil the surprise. Suffice it to say that I’m going to help you get your share of all the profit potential I find …

  • In just 15 minutes per week, and …
  • For much less than the cost of one cup of coffee per day.

You can’t join NEW TECH SUPERSTARS now, but you can guarantee yourself a seat at the unveiling:

Registration for the April 8 launch event is NOW OPEN. Simply click this link to reserve your place.

Please do NOT miss it: This is one briefing you will NOT want to miss!

Best wishes,

Jon Markman

P.S. Let’s talk tech stocks! Here’s your chance to ask me anything you like about technology stocks: Simply submit your comments and questions below. I’ll check in during the day and give you my best answers to your questions. I won’t be able to do this forever, so be sure to join the conversation right away!

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Tech Stocks: The Poor Man’s Way to Riches

by Jon Markman on March 26, 2014

Jon Markman

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with Jon Markman!

Of all the excuses I hear from investors who are missing out on today’s boom in tech stocks, the one that puzzles me the most is this one:

“I simply don’t have enough money to take advantage of rising tech stocks.”

To that, I can only respond, “Really? Do you have $32?”

Because that’s how much we pay for the average technology stock in my model portfolio: Just $32.

You can’t even buy a full tank of gas for $32 these days — let alone a decent dinner for two.

xxxxx
You can buy a potential tech superstar for less than it costs to fill your gas tank.

And yet, if recent history is any indication, the $32 you pay for one of these new tech superstars could very well become $64 … $96 … or even $128 for you.

Skeptical? I understand — but remember: A whopping 93% of the new technology superstars in my model portfolio are up — with gains of 114% … 178% … 156% … 234% … as much as 305%.

That 305% gain is more than a quadruple — and it sure doesn’t take many of those to turn a poor man into a rich one!

The great thing is that ALL of today’s tech superstars were cheap once — and just look how much they’re up on a split-adjusted basis:

  • Nvidia IPOd at $12. Today, it’s up 1,682%.
  • Lam Research first sold at $10 per share. Today, it’s up 2,228%.
  • Intel started life at $23.50 per share. Now, it’s up 8,303%.
  • Applied Materials began as a $10 stock. It has soared 8,646% since then.
  • Dell IPOd at just $8.50. Today, it’s up 13,718%; enough to multiply your money 137 times over.
  • Apple began as a $22 stock before it skyrocketed 14,950%.
  • Qualcomm once went for just $16 per share before exploding 15,651%.
  • You could have once bought EMC for just $16.50 per share. Today, it’s up 15,944%.
  • Amazon started out as an $18 stock. It’s up 19,051%.
  • Cisco also started life as an $18 stock. It’s up 34,316%.
  • Adobe IPOd at just $11 per share. It’s up 40,000%.
  • And Oracle began as a $15 stock. It’s up 58,881%.

For every $1 you invested in Oracle, you’d have $588 today. At that rate, $10,000 becomes nearly $6 million and $25,000 becomes nearly $15 million.

… All with a stock that only cost $15 a few years ago.

No doubt about it:

Cheap stocks with the power to quadruple your money
are the ultimate “Poor Man’s Way to Riches.”

To me, technology stocks are the ideal egalitarian investment. They don’t care who you are, how much education you have, even how much money you have.

These young technology superstars are all about tomorrow. When you invest in them, you are investing in a brighter future for all of us — and especially for YOURSELF.

Best wishes,

Jon Markman

P.S. Let’s talk tech stocks! Here’s your chance to ask me anything you like about technology stocks: Simply submit your comments and questions below. I’ll check in during the day and give you my best answers to your questions. I won’t be able to do this forever, so be sure to join the conversation right away!



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Tech Stock Profits for Non-Geeks

by Jon Markman on March 24, 2014

Jon Markman

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OK, so I admit it: I’m a geek.

I love technology. I eat, sleep and breathe the stuff. Been doing it for nearly a quarter century, now.

I began reporting on tech and investment strategies back in the 90s at the LA Times.

Then, when Microsoft drafted me to help start MSN Money, I was suddenly through the looking glass and into the thick of it; sitting for hours in meetings with amazing young technologists … watching the process from the inside … and later developing the StockScouter screening software that has helped me pick many of the biggest early winners in technology.

Nowadays, as I help individual investors harness this great new bull market in technology, I put that experience to work every trading day of the year.

Unfortunately, the vast majority of American’s aren’t nearly as comfortable with technology as I am.

Sure; they love their computers, smartphones and tablets. Most have mastered email, Amazon.com and Facebook. Still more have benefited from medicine or other treatments developed by a biotech firm.

But ask them to identify the next new tech superstar, you’re going to get a blank stare.

So it’s not surprising that more than a few of our readers — including Charlie from Jacksonville, FL — have messaged me to say, “I’d invest in technology companies if I could; but frankly, I wouldn’t even know how to begin.”

I understand! After all, to find the next big winners yourself, you’d have to …

1. Identify tomorrow’s technology titans: Separate the wheat from the chaff; the overhyped dead-end stocks that can only cost you money and break your heart from the companies that are destined to be the Amazons, Apples and Microsofts of the 21st Century.

That takes more than just hard work. It takes a deep, visceral understanding of how technology works as well as the qualities that are required to transform a small, virtually unknown company into one of tomorrow’s tech titans.

That’s my specialty; my passion; what I’ve done every day since the early 1990s and what I’ve do every trading day of the year right now in 2014.

It also helps to know which stocks industry insiders are most excited about now. The young companies that the savviest players inside America’s smartest technology companies are buzzing about.

As a part of that community, I know many of the players and speak to them regularly. I know who to call when I have a question. And I have access to the CEOs and other key players at many of the most exciting up-and-comers.

2. Buy them right: Paying too much for one of these young technology titans is no way to get rich — but it is a way to buy into more stress than anyone wants.

Buying at the IPO then watching helplessly as your prized stock plunges by half when the IPO hysteria dies down is a prescription for heartburn or worse.

3. SELL them right: It’s not just about making money on paper. It’s about keeping what you earn. That means you need to know when to cut a loss, take a profit — or, if a major correction is in the offing, take your money off the table entirely.

Put simply, doing it right can be a full-time job. My guess is you already have several. But that’s why I’M here!

Helping you profit from great technology companies — from the new technology superstars — is what I do.

Here’s how I do it:

What to buy

I begin with companies that …

  • Are big enough to matter with revenues of $200 million to $1 billion per year — so you know you’re buying a viable company with real earnings power likely to weather any storm …
  • Have proven management teams that have surpassed expectations revenue growth and have lifted their earnings guidance — so you know the prospects for future growth are solid …
  • Have gone public in the past six months to two years or so and have already undergone their post-IPO slumps — so you get them when the hype has died down and valuation is subdued …

I also strongly prefer buying companies that …

  • Address a very large market with few competitors so they have room to run without interference …
  • Have rock-solid patent protection so they’re not forced to cut prices to compete …
  • Are easy to explain so tech-challenged mutual fund and hedge fund managers and everyday investors can understand them and get excited about them …
  • Work in a niche that is not well known at present so they’re still bargains … but are likely to skyrocket in value as they become widely known, and that …
  • Make things that are better, cheaper or faster than their competitors.

When to sell

Knowing when to buy is critical — but knowing when it’s time to take your money off of the table is absolutely critical. My sell signals are typically triggered when one of the following occurs:

1. The stock’s valuation moves from incredible to outrageous …

2. The company posts more than one quarterly earnings miss in a row …

3. The stock sinks below price support on high volume, or …

4. I spot a greater profit opportunity in a newcomer.

That’s it! That’s my entire process. Now, you can be an expert tech stock picker, too. It’s not rocket science, even when you’re buying companies that make rockets: Buy low, sell high, and make sure you know the difference.

Or, if you prefer, just stay tuned and we can do this together.

Best wishes,

Jon Markman

P.S. Let’s talk tech stocks! Here’s your chance to ask me anything you like about technology stocks: Simply submit your comments and questions below. I’ll check in during the day and give you my best answers to your questions. I won’t be able to do this forever, so be sure to join the conversation right away!

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Is “Bubblephobia” Costing You a Fortune?

by Jon Markman on March 23, 2014

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with Jon Markman!

Bubblephobia — the fear of bubbles — has millions of Americans in its grips these days and for good reason. We’ve had two bubbles burst in the past 14 years and each one cost investors dearly.

Investors who are stricken with this common malady don’t see how much money everyone else is making or how much money it’s costing them to sit on the sidelines, watching the parade pass by.

All they know for sure is that one day — eventually — it will end badly.

And you know what? They’re right!

Every bull market in history has ended in a correction. Some have even ended in massive, painful crashes.

Recently, as we’ve continued our conversation about technology stocks, I’ve heard from several bubblephobes — like Janet of Providence, RI who says …

“The stock market is in bubble-land. No way do I want to be in any kind of stock when the bubble bursts.”

I respect your opinion, Janet. Believe me I do. But forgive me if I respectfully disagree.

xxxxx
The fear of bubbles has cost investors dearly.

First, because for all the reasons I presented Wednesday, all indicators point to the likelihood that we are only about half-way through this bull market.

And second, because I love bubbles.

Bubbles are the single most important part of the investment cycle. They are all about optimism among investors and the public about the future of a technology or service.

You need that kind of enthusiasm to build things that otherwise would never be built, like the transcontinental railway, the airplane, hundreds of thousands of miles of “dark fiber” in the 1990s and so on.

Avoiding bubbles is the LAST thing I want to do.

After all — that’s when things are going UP!

What we need to do is participate fully in each bubble as it comes … make all the money we can while the sun is shining … then get all of our money off the table quickly when the inevitable correction comes.

Do I wish I’d never invested in tech stocks in the 1990s — forfeited all the profits I earned while they were going up?

Do I wish I’d never invested in real estate or any other kind of stock when they were on fire in 2006 and 2007 and forfeited those profits as well?

No, because while we have the freedom to make all the money we want when stocks are going up, there’s no law that says we have to hold those stocks when they start going down!

In other words, we can take most of the good without taking all of the bad.

I’ve done it twice myself: Once in 2000 when I saw the end of the tech boom coming and again in 2007-2008 when the end of the housing boom reared its ugly head.

How we’ll know when the bubble is about to burst

There’s actually a dead give-away: Valuations.

When they’re high and rising, it’s a good thing. It means there’s still time to make money.

But when valuations get insane — like just before the tech wreck when companies with no earnings were trading at up to 148 times book value — it’s time to take your profits off the table.

That’s when patience pays. We wait for things to unwind, then jump back in near the bottom and pick up the survivors for pennies on the dollar.

I know that sounds easy when you say it fast — it’s much tougher to do in the real world. But it’s not impossible. We have all seen it twice before and will likely have a chance to do it again before our investing careers are over.

And in the meantime, it looks for all the world as if these young tech superstars will continue helping us multiply our money for years to come.

Best wishes,

Jon Markman

P.S. Let’s talk tech stocks! Here’s your chance to ask me anything you like about technology stocks: Simply submit your comments and questions below. I’ll check in during the day and give you my best answers to your questions. I won’t be able to do this forever, so be sure to join the conversation right away!

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Turning $25,000 into $12 million

by Jon Markman on March 21, 2014

John Markman

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CLICK HERE to talk tech stocks
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I’ve become rather well-known recently for telling investors that when it comes to technology stocks, it’s time to dream BIG again.

But is that really true? Could the profits ahead be anywhere close to the massive, overwhelming windfalls we experienced in the 1990s?

Sure: The average tech stock is trouncing the S&P 500 year-to-date, producing $2 in gains for every $1 earned on the overall index.

And yes, 93% of the new technology superstars in my model portfolio are up — with gains of up to 305% — enough to more than quadruple your money.

But let’s face it: That’s a far cry from gains early investors made the first time around.

Since its IPO, eBay is up 6,905% … Yahoo is up 7,282% … Amazon.com is up 19,864% … Apple is up 15,852% …

And Microsoft — arguably, the all-time tech stock champ — is up an astonishing 48,559%; enough to multiply your money 48,559 times over and turn a simple $25,000 investment into well over $12 million.

Could the stocks I’m recommending now do as well as Microsoft? Honestly? Probably not. These are not the 90s. This is an entirely different time and place.

But that’s really OK: Even if these new technology superstars only do ten percent as well as Microsoft, your $25,000 investment could turn into more than $1.2 million …

And if they only do ONE percent as well, your $25,000 would grow to over $120,000. You could walk away with a gain of nearly $100,000!

But some folks still worry. Like Robert of Boise, Idaho, who recently wrote me to say …

“I’m convinced that the U.S. dollar is about to crash and burn. Wouldn’t that put a chill on these red-hot tech stocks?”

My answer: A decline in the U.S. dollar — even a crash — could be one of the BEST things that could happen to tech stocks for two critical reasons:

First, a decline in the U.S. dollar causes inflation; rising prices. And one of the first things to rise tends to be financial assets.

It’s called, appropriately enough,“asset inflation” — and you’ve actually seen it happen before your very eyes lately.

Since the Fed began printing money willy-nilly in 2008, asset prices have exploded. The S&P 500 has soared 82.8%. Gold is up 60.4%. And silver has skyrocketed 79.3% higher.

Now this is important: All that asset inflation — and the profits it has made investors so far — are probably only drops in the proverbial bucket. Because until now, only a tiny portion of the $3 trillion the Fed printed has trickled off of bank balance sheets into the economy.

Now, though, that trickle is turning into a flood and that means the price inflation in stocks — including technology stocks — could very well intensify in the months ahead.

Second, a falling dollar is actually one of the best things that could possibly happen to U.S. tech companies because it makes their products cheaper — and by definition, more competitive overseas.

Let’s say a French company wants plans to spend $10 million to install business-management software. It has narrowed the field of vendors down to just two. The company will either buy the software from German giant SAP or from U.S. giant Oracle.

Now, let’s say the dollar plunges 20 percent against the euro, making the Oracle software 20% cheaper than the SAP equivalent.

If you were the French CEO, what would your decision be? To pay more for the German software? Or to save 20% — $2 million — by purchasing the U.S. company’s product?

See the point? Instead of fearing inflation, we technology investors can harness it to grab tremendous profit potential.

And after all — if the question is,“How will you live when everything costs more …”

Wouldn’t the best answer be,“Make more money!”?

Best wishes,

Jon Markman

P.S. Let’s talk tech stocks! Here’s your chance to ask me anything you like about technology stocks: Simply submit your comments and questions below. I’ll check in during the day and give you my best answers to your questions. I won’t be able to do this forever, so be sure to join the conversation right away!

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ISI Research: Epic profits ahead!

by Jon Markman on March 19, 2014

Jon Markman

Scroll down to read the article or
CLICK HERE to talk tech stocks
with Jon Markman!

Since I contributed my first article as Money and Markets’ technology stock specialist in February, readers have asked me hundreds of questions in emails and on our blog.

And for good reason: After trouncing the averages in 2013, the average technology stock is beating the average S&P 500 stock by a whopping six to one this year.

More importantly, a whopping 93% of the new technology superstars in my model portfolio are up — with gains of 114% … 178% … 156% … 234% … as much as 305%.

Nevertheless, more than a few readers are still wary. For instance, one reader says,

“I’m hesitant to invest in technology stocks now because I’m worried that the stock market could crash or we could have another major recession.”

I certainly understand this concern. But to put this concern into perspective, let’s look at the past 114 years of U.S. history, back to 1900 just to pick a round number:

We’ve been through two world wars in Europe and one in Asia, two nuclear blasts, countless smaller wars, countless plagues, countless genocides, countless super-destructive hurricanes, tsunamis, and earthquakes, some of the worst political leadership imaginable, at least five serious bear markets, several market crashes, numerous recessions, a global depression, and yet, hey — we are still standing.

… And stocks are up 10,000% from where they were in 1900 before all these terrible things happened.

The plain truth is …

It is part of the human condition to stumble,

but also to get up with a smile and move on even faster.

Without doubt I worry about the potential for trouble ahead at all times, but there are numerous ways to prepare, such as having a diversified set of investments, some cash on hand to take advantage of big dips in value, and the conviction to know you are on the right path even when the road ahead seems dark.

At times like those, I am always reminded of a quote from one of my favorite portfolio managers, Peter Lynch, who managed the famed Magellan Fund for Fidelity during its heyday. He said:

“Your ultimate success or failure will depend on your ability to ignore the worries of the world long enough to allow your investments to succeed.
It isn’t the head but the stomach that determines the fate of the stock picker.”

The immediate outlook:

Partly cloudy with a chance of epic profits.

Are there clouds on the horizon today? Of course. But there are always clouds on the horizon.

But to be frank, I am not terribly worried about the U.S. economy right now. The data has been uneven of late, but that’s par for the course. It’s never going to be perfect; don’t expect that.

Here are some important bullet points to keep in mind as we steam toward the second quarter, with help from the analysts at International Strategy & Investment (ISI) — the prestigious investment research firm in New York:

— The Wilshire 5000, the broadest measure of U.S. stocks, is now above 20,000 despite Russia, the China bond default and tapering. People just want to buy stocks, and they are largely ignoring news developments that, in choppy or negative markets, would lead to persistent selling.

— The key takeaway from the February payrolls data was that the U.S. economy is alright, and can survive a bad winter. Payroll employment was reported up 200,000 with revisions, and is on track to move above its 2007 level in just four months. From the low four years ago, it is up 8 million, or an average of 167,000 per month.

— U.S. consumer net worth has hit a new high at $82.2 trillion, up $8.1 trillion year over year and roughly $13 trillion over its 2007 peak. This is a big positive for consumer spending over the rest of the year.

— Real GDP (i.e. GDP minus inflation) is on track to increase 2.7% year/year and $1 trillion over its 2007 peak despite the government sequester, shutdown, Fed taper and bad weather.

— Corporate cash surged to almost $2 trillion in the fourth quarter, which is nearly a third above its 2007 peak. This is a positive for capital expenditures, and employment in the months ahead.

— And more: Lately there have been positive readings for unemployment claims, hotel revenues, railcar loadings, the rig count, construction spending and ECRI’s leading index.

Bottom line? The U.S. economy is not taking off like a rocket, but is expanding at a reasonable pace. Maybe not as fast as some would like, but a pace that probably makes the advance more sustainable.

This bull market may have

five more years to run!

ISI observes that we are in the middle of a business cycle; not the beginning, and not the end.

That means some of the best is yet to come.

You will recognize the start of the end game, which itself can last years, when inflation accelerates and the Fed starts tightening — events not expected to begin until the middle of next year at the earliest.

What’s more, the warning signs of an impending correction tend to be fairly obvious if you know how to look for them — and they can help you get your cash to safety in plenty of time.

While I was one of America’s greatest cheerleaders for technology stocks throughout the late 1980s and most of the 1990s, I also have the distinction of being one of the few in Silicon Valley to publicly warn that a correction was coming.

If you had heeded that warning, you could have taken much of your profits off of the table intact. You wouldn’t have had to lose a dime in the major correction that followed.

In addition, I publicly warned of the housing bust, Great Recession and stock market collapse of 2008-2009 many months in advance — and you have my word that I’ll continue to keep a wary eye out for danger even as I help you go for substantial profits.

Also: Please recognize that many technology stocks seem to be virtually impervious to overall market corrections.

Even in the worst of the financial crisis of 2007-2009, many of the top biotech companies, such as Gilead Sciences (GILD) and Alexion Pharmaceuticals (ALXN), held steady while the broad market fell by as much as 56 percent.

In summary, even if you have a small portfolio, and even if you don’t know much about computer code or chips, or do not have time to devote to learning more, this can still be the right time to try investing in tech stocks.

Because once you take a shot at it, however small at first, and start to have some success, then you will realize you are a lot better at it than you thought, and that will lead to more confidence, more interest, a reinforced desire to learn more, and in turn even better results.

Like any journey of discovery, there will be some potholes, mudslides, detours and stumbles along the way, to be sure, but the path is long and the skies are bright and you have an experienced companion at your side. Take the first step, and the rest will follow.

Best wishes,

Jon Markman

P.S. Let’s talk tech stocks! Here’s your chance to ask me anything you like about technology stocks: Simply submit your comments and questions below. I’ll check in during the day and give you my best answers to your questions. I won’t be able to do this forever, so be sure to join the conversation right away!

{ 61 comments }

So Many Great Stocks, I Scarcely Know Where to Begin

by Jon Markman on March 14, 2014

Scroll down to read the article or
CLICK HERE to talk tech stocks
with Jon Markman!

John Markman

Over the past few weeks I have written several Money and Markets articles to alert you to the amazing opportunities that are out there right now in technology stocks. A whole new crop of talented, inspired entrepreneurs — motivated by the success stories of those companies like Apple, Google and Amazon that came before — are right now creating new businesses, and in some cases whole new sub-sectors.

They are hard at work and dreaming big to discover innovative ways to combine mobile, healthcare, internet and communications technologies, and integrate them into new products and services you haven’t even dreamed of yet … but someday you won’t be able to live without.

xxxxx
A new crop of fast-growing technology companies are about to create newfound riches for shareholders.

And the new crop of young, hungry and fast-growing technology companies they’re founding are about to create newfound riches for shareholders too.

I have received hundreds of terrific questions and comments from Money and Markets readers over the past few weeks. And in today’s article, I intend to highlight some of the most intriguing questions, and give you my best answers. So lets’ get started.

There were several questions about technology stocks of yesteryear, and although I’m more focused on the technology superstars of tomorrow, I also recognize that many of you may already be invested in larger cap technology stocks for dividends and turnaround potential. So here’s my take on a few of them:

Jim B. asks:

What are your thoughts on Microsoft (MSFT), now that they have a new president? Will Gates and Ballmer let him control MSFT? Will MSFT develop a vision for the future and turn loose the creative juices of those 80,000 employees?

Jon responds:

Microsoft will be better under its new management. But it is already a very large company and does not have a massive growth path ahead. It will act like a nice, solid utility, fairly slow growing with a decent dividend. Not a horror show, but nothing special.

Gary B. wants to know:

What is your opinion of Cisco Systems (CSCO) and Microsoft (MSFT)?

Jon answers:

Cisco Systems needs new leadership; it will go up when the board replaces CEO John Chambers.

Microsoft is not too exciting. It’s not a lost cause, but there is just not much in their portfolio at present that is likely to move the needle. In a company that big, new product cycles have to be massive to make a difference. Otherwise the company just lumbers along like a utility, making a lot of money but not with the kind of growth that investors pay up for.

Steve asks:

What is your opinion on Apple (AAPL), is it time to buy?

My reply:

Apple is just another big industrial technology/retailing stock now. Its best days of growth are most likely in the rear view mirror. That’s not to say it won’t make some decent products, but the growth rate for now is paltry and innovation appears to have ground to a halt. They have given up a lot of their momentum and market share. I own it but I have low expectations.

There are several great questions about the right approach and time horizon you need to have in mind when it comes to investing in technology stocks …

Domenic asked:

If a person were going to make an investment in a tech stock with the hopes of something extraordinary in say 2 to 6 years, what stock might that person consider?

My response:

I will be talking about some emerging technology companies with lots of potential, but I would not focus on just one. Most people should diversify and have five to ten or more of them.

Josh inquires:

If you could build a concentrated, go-for-broke-type of tech portfolio near-term performance of your five best emerging high growth favorites, what would they be?

Jon’s comment:

The market gods don’t like us to think of time frames in which we just have to have a certain level of performance with a certain number of positions. Each stock is going to have its own time horizon based on its business, customers and the environment. Don’t get sucked into the “instant gratification” or speed game.

Here is a grab-bag of technology Q&A including some tech-superstars of tomorrow that are among my favorites right now, and which stocks and sub-sectors to avoid now too …

Herman R. wants to know:

What are your top three tech companies to get in on the ground floor?

My reply:

Almost all of the stocks that I have been discussing may look as if they are up a lot, but they are still in the early innings. It is sort of like saying, “Wow, Dell is up 1,000% in 1995, that must be it” — and then it goes up another 10,000% over the next few years.

In addition to the stocks I mentioned already: ExamWorks (EXAM), Splunk (SPLK), and NXP Semiconductors (NXPI) — there will be more to come, and I’ll be discussing them all in detail at the appropriate time.

Allen asks:

What is likely the best tech ETF to hold?

Jon

There are plenty of great technology ETFs tracking the various sub-sectors of the tech industry, including biotech and medical technology (don’t forget those). But one of my favorites is First Trust Tech Alphadex ETF (FXL), but another one that also includes biotechs is just golden-oldie Nasdaq 100 Trust (QQQ).

From Brian:

How do you feel about investing in 3D printing? I am reading that DDD, DASTY and SSSYS are the top companies. Your thoughts?

Jon

3D printing has a bright future but most of these companies are very overvalued and they just aren’t producing enough revenue yet to match their stock prices. 3D printing is mostly a game show for now. It’s not a big market yet, though it has potential to be as time goes on.

From William:

Jon, still waiting to find out about the “chips or devices that allow machines to talk to each other and have intelligence.”

Reply

One of the main chip makers in that space is NXP Semiconductor (NXPI). I have been recommending it since September 2012 at $26, but it is pretty overbought now above $57 a share, and I would wait for it to simmer down a bit.

A lot of people seem to have just discovered it. Just be patient and wait for it to at least pull back to its 50-day moving average. That would be around $51 if it happened now, but could be higher if it happens later in the year.

Alan Q. asks:

What cloud computing stocks do you recommend?

Jon Markman

I’ve been talking about and investing in cloud-computing stocks for a long time, and what’s kind of interesting is that the term today is so broad that it’s almost meaningless.

In a way, the cloud has basically taken over as a paradigm for offsite data storage and retrieval, so it can encompass everything from Google (GOOG) and Dropbox to datacenter companies like CoreSite Realty (COR) and InterXion (INXN).

I prefer to focus more on the “software as a service” stocks that are largely based in the cloud as they have more individuality and higher profit margins. I’m talking about stocks like WorkDay (WDAY), Salesforce.com (CRM), Benefitfocus (BNFT) etc.

But there are many, many more which we will discuss in coming weeks and months.

Here are a couple questions about medical-technology stocks and biotechnology, two sectors where I’m also finding plenty of stocks with outstanding upside potential  …

Carl comments:

Frankly I do not understand tech stocks very well. Yes, it does seem that tech and biotech are the areas that see explosive growth, but finding the right ones is tough. Need to find a way to separate the good from the bad.

I’m wondering if there is a sensible formula to follow?

Jon replies:

Your comment about biotech is very apropos. For a long time, I stayed away from them because I am a sucker for a good story. And they all have great stories.

They are all going to cure cancer, or hepatitis, or AIDS, or whatever. But the reality is that very few will get their therapies or molecules through the FDA, and even if they do, it can be hard to get good distribution quickly.

For that reason I tend to focus more on biotechs that have already been successful with at least one molecule or drug or treatment — or even better — companies whose main drug or therapy or device has already been cleared by the FDA. This takes away a lot of the risk.

Yes, you will give up some upside, but you will also avoid a lot of downside. And there are plenty of companies in the category that I just mentioned, such as Pacira Pharmaceuticals (PCRX), which has an approved treatment for post-operative pain and is now building out its sales force to get its products into as many hospitals as possible.

From George:

We agree with your research & core thesis on Robots. The big question: What are the three best companies that have a decent chance for stellar success?

Jon

At the end of the day, most robots are just industrial machinery with a little more software. They do repetitive tasks. They are really not much more interesting than other industrial equipment. In fact, some of the best robotic plays are the companies that make the best use of them in an effort to get production efficiency.

Some of the most interesting in the space are used in medical applications like surgery, and are not actually robots but finely tuned, precision machines that enhance the ability of surgeons to perform their work.

My favorites in the space now include: Cognex (CGNX) and Intuitive Surgical (ISRG). I also like John Bean Tech (JBT) for its Automated Guided Vehicle division, and Rockwell Automation (ROK).

I’m not recommending any of these right now; I’m just telling you to keep an eye on them. My specialty is young emerging tech stocks just a few months or a couple years post-IPO, so I will be writing about some of them in the very near future.

And finally, there are quite a few readers who are eager to get started uncovering the technology superstars of tomorrow …

Ken asks:

Jon, I thoroughly enjoy reading your columns. However, I was led to believe that you would be making buy recommendations on certain stocks. So far nothing?

Jon responds:

Ken, thanks — glad you like the articles.

I am chomping at the bit to deliver some new ideas and specific buy recommendations. I have plenty of them in mind, and will have more as time goes on. But first I thought you would like a bit of an introduction to my investment style and thought process: what I look for in a potential technology superstar of tomorrow.

Rest assured, when the time is right, I will get down to the nitty-gritty: specific recommendations of new technology hot-shot stocks — some well known, many still unknown — that will help us grow our fortunes together.

Until then, just enjoy the conversation. And by the way, even now a lot of the already successful stocks I have mentioned in the past few weeks, like NXP Semiconductor (NXPI), Splunk (SPLK) and Pacira Pharma (PCRX), appear to be consolidating and preparing to move higher again.

From Lew:

Jon, for several weeks now you have been telling us about your past successes. When can we look for some recommendations?

Jon

Hi Lew — most of the stocks I have been talking about are not really “past successes.” They are stocks I have recommended in the past few months and still recommend!

There will be many more new recommendations coming soon as well, but you’ll have to be patient. Most of my best ideas are companies that have gone public recently and the pipeline for the best stocks is pretty narrow. But some are percolating now and will be ready for takeoff soon.

Bottom line: So many incredible companies are being created now to build communications apps, marketing tools, social media connectivity, games, search engines, photo-sharing platforms and analytics services that you scarcely know where to begin as an investor. Thank you for joining in this conversation and for all of the terrific feedback. This is truly the best time to be an investor in technology that I have seen in my 35-year career. And I’m so glad you’re along for the ride!

Best wishes,

Jon Markman

P.S. Want to talk tech stocks! Here’s your chance to ask me anything you like about technology stocks: Simply leave a comment below. I’ll check in during the day and give you my best answers to your questions.

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Mike Burnick

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Investors have certainly experienced some tough times in technology stocks over the years. After the post-Y2K technology bubble burst in 2000, tech shares were the hardest hit during a three-year long bear market.

Back on their feet again in the mid-2000s, tech stocks get hit hard once again — along with nearly every other asset class — during the financial crisis from 2007 to 2009. In fact, the Nasdaq 100 Index, home to the largest and most successful technology stocks including Microsoft, Amazon and Apple, has returned a grand total of just 10.9 percent since January 1, 2000, equal to an average annual gain of just 0.7 per year (and that includes reinvested dividends).

In other words, 14 long years with very little upside! Some investors might see this as the curse of technology … but I see it as a blessing in disguise.

You see, all markets move in cycles. It’s a principle called mean-reversion, which is just a fancy financial term for a simple parable taught in Sunday school class: The last shall be first, and the first last.

Some market cycles are extremely long; after all, it takes awhile for what goes around to come around again, and back into favor with investors. Commodities and emerging markets are both prime examples of markets with long cycles. And so are technology stocks.

xxxxx
The wonderful thing about technology as an investment is this: There is always a new app coming down the line.

That’s because technology is a constant battle of creative destruction. New technologies emerge, are rapidly adopted, and finally go mainstream. Competition heats up until the sector gets crowded with too many players, then profits fall and the cycle turns. Whatever happened to all those PC makers that struck it rich in the 1980s? Many of these stocks are long gone.

But the wonderful thing about technology as an investment is this: There is always a new app coming down the line. New products and services that we simply can’t live without (literally in the case of biotechnology) are constantly being invented, spurring a brand new cycle of technology innovation. It happens over and over again just like clockwork.

The latest bullish technology cycle is just getting underway now, and fortunes are already being made. It’s all about the mobile internet and smartphone technology. Recently, my colleague Jon Markman has been writing about the newest opportunities in technology today. His advice in a nutshell is this: You ain’t seen nothing yet!

It’s a fact that dozens of technology stocks, most you’ve probably never heard of before, are already posting huge gains. As Jon points out, “the products and services available now are absolutely astounding.” New, up-and-coming tech firms are empowering people the world over and this “incredibly rich outpouring of innovation is making this time, right here, right now, the most amazing time ever to be an investor.”

In fact, several stocks that Jon has personally recommended in the past year are already well on their way to creating new technology fortunes for investors.

For example, ExamWorks (EXAM) is helping modernize the health care industry by streamlining the paperwork and reporting for patients, doctors and health insurers alike. Jon recommended the stock in July 2013 at just $13.52 per share. EXAM is up 163.8 percent since then … in just over six months.

And Tableau Software (DATA), which only just had its initial public stock offering (IPO) in May 2013. This young tech stock is well-positioned in the fast-growing field of data visualization. Jon waited for the IPO hype to die-down, according to his disciplined research, before recommending DATA last October; and the shares are up 50.5 percent since then.

As Jon says, “this is truly the best time to be an investor in technology stocks that I have seen in my 35-year career.” Could ExamWorks or Tableau Software become the next Cerner or Microsoft? Jon believes we can do even better than that!

Good investing,

Mike Burnick

P.S. Want to talk tech stocks? Here’s your chance to ask our newest Money and Markets editor, Jon Markman, anything you like about technology stocks: Simply leave a comment below. He’ll check in during the day and give you his best answers to your questions.

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Tech’s new golden age is now

by Jon Markman on March 10, 2014

John Markman

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Back in the 1990s, a wunderkind tech analyst at Goldman Sachs was once asked the best time to buy Microsoft (MSFT) stock. “Between 9:30 in the morning and 4 in the afternoon,” he quipped. “Whenever the market is open.”

That was certainly great advice during the go-go decade when tech stocks reigned supreme, and almost any position you took in technology software, hardware or services was golden if you had just a smidge of luck and a good eye for value.

Microsoft itself rose about 65,000 percent from its IPO in 1986 to its high in 2000 — turning a $1,000 investment on the day of its IPO into $650,000 about 14 years later. But there were half a dozen stocks that did as well or better. Data storage giant EMC (EMC) rose 87,500 percent from its 1988 debut to its high in 2000. Dell rose around 70,000 percent from IPO to the high, while AOL was up around 60,000 percent and Cisco Systems (CSCO) was up around 45,000 percent.

Great tech growth stories all: category killers, led by smart managers, graced with the good fortune of being in the right place at the right time with the right products.

But hey, guess what? Spoiler alert. Right now is an even better time to invest in tech stocks. And it’s easy to understand why, if you think about it.

xxxxx
Movies, music, stock trading, photo sharing. It’s all about mobile.

Back in the 1990s, very few individuals used technology. It was mostly for companies. Microsoft’s software was primarily bought by businesses for their workers. Cisco’s equipment networked companies’ workers together. EMC’s storage units attached to giant mainframes. Dell’s low-priced PCs were mostly bought for desks in offices. Of this group, only AOL provided a consumer service, a clumsy dial-up product that we would now call an app since all activity was done within the walls of its quirky little domain.

Looking back on the products that launched such fortunes, you can scarcely believe any of these products or services were ever considered cool. Early versions of Microsoft DOS, or its first version of Word and Excel, or the 90s-era Dell computers are just laughable when viewed today. The artwork is clumsy, the speeds are painfully slow, it was hard to hook up peripherals like printers and speakers, and they were incredibly expensive. But man, you just had to have them if you could.

And by the way, back then in the supposed heyday of tech stocks, there was absolutely no consumer wireless. To have a car phone was a big deal; they were big and service was terrible. Later on, when the first consumer wireless phones emerged from Nokia and Motorola, they could not do anything but, well, dial other phones. No texting, no Internet, no cameras, no Netflix, no MLB highlights. There was one game, called Snake. So lame.

Yet sales rocked and shares of those companies made savvy early investors fortunes. At the end, sure, everyone knows by now, they became over-loved and over-valued. But don’t forget the good times that came first. Or the fact that their demise was easily seen well in advance, by myself and others.

Now let’s fast forward to the present. Techs went through some dark times, but now on the other side the prospects are brighter than ever. More amazing than those pioneers in the 1990s could have even dreamed. The products and services available now, even to kids for pennies, are absolutely astounding. For a time traveler from the 1990s to today, it’s like going from a fuzzy black-and-white TV to Technicolor HD on a six-story IMAX screen.

And the fortunes being made today? Oh, brother. In the private market, how about that guy who sold his messaging app to Facebook the other day for $19 billion. They don’t even make enough zeroes to calculate the ROI on that guy’s early investors. It took years for the likes of Dell or Microsoft to reach $5 billion in market cap. That can happen now in just a few months.

Why? It’s all about mobile. That thing in your pocket that you call a smartphone is really a computer. Instead of buying software for $100 on disks from stores and driving home to install it on your desktop, you download an app for $1 or less through the air, and you are good to go. Movies, music, stock trading, photo sharing — all available instantly, at very little cost, and so simple that children can operate it all without reading a single manual. Even old people can do it.

Millions and millions of people. Billions of people overseas. Even in remote areas of Africa and Indonesia, a person without running water can be a click away from the knowledge of every library on earth through a Web browser or an app on their phone. Knowledge is power and power is so very valuable. The new world of mobile communications is empowering unusual people in faraway places to connect and create things and services that were never previously imagined, and that incredibly rich outpouring of innovation is making this time, right here, right now, the most amazing time ever to be an investor.

So many incredible companies are being created now to build communications apps, marketing tools, social media connectivity, games, search engines, photo-sharing platforms and analytics services that you scarcely know where to begin as an investor. And the hardware, too, both in terms of new movement-sensing chips like NXP Semiconductors (NXPI), camera chips like Ambarella (AMBA), or handheld devices like the iPad of Apple (AAPL).

This is truly the best time to be an investor in technology products that I have seen in my 35-year career. And the good news is that most of the time, investors are quite skeptical of the prospects of young companies. They remember being burned in 2000 and 2007. They are cautious at first and usually fail to value the companies as highly as they should at the start.

And that is the best development of all if you are the type of person who doesn’t mind rolling up your sleeves a bit to understand what the companies do, how they make their money, how unique their products are, how robust demand is, how capable management is, and what the difference might be between their current value and what they will be worth once they have a few more years of experience.

If you can do that effectively, and retain the capacity to dream big in the process, then you can arbitrage, or profit from, the difference between the cautious price set soon after an initial public offering and the ebullient price seen a couple years down the road when the firm is much better known and its value is appreciated by many more people.

The next Microsoft? The next Dell? We can do better than that. The past is but prologue.

Best wishes,

Jon Markman

P.S. Let’s talk tech stocks!

Here’s your chance to ask me anything you like about technology stocks: Simply leave a comment below. I’ll check in during the day and give you my best answers to your questions.

I won’t be able to do this forever, so be sure to join the conversation right away!

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John Ross Crooks

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If you could go back in time to 2005, what would you do?

Well, you’d probably sell your home, I hope, if you were planning on moving any time before the next ice age.

But what if you couldn’t sell your home? What if you were stuck in an illiquid asset that you knew was going to lose a substantial amount of value in the coming years? And what if you couldn’t do anything to stop it? Well, you could hedge your bet by selling short collateralized debt obligations and asset-backed securities. Or you could buy an inverse ETF that is meant to rise as real estate prices fall.

There are many things in life that discourage us, many times we feel helpless. But for those of us determined to do more than just survive, we press on. We find ways to stop the bleeding. We batten down the hatches. We prepare.

I can’t help but think we’re soon to encounter a similarly challenging situation (if it’s not already staring us down). Now is the time to prepare for it because …

The robots are coming.

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The demand for robots is rising. That’s because the feasibility of robots is rising.

Since the 2008 financial crisis, unemployment in the U.S. (and globally, for that matter) has been a lingering concern. Rosy expectations for economic recovery are mostly pared back by lackluster improvement in the labor market.

In the U.S., things have been looking a bit better lately. But workforce participation and wage growth remains a concern. And this sluggishness raises an unwelcomed question: Are we facing structural unemployment?

There’s a lot out there to suggest many jobs aren’t coming back. And there’s even some indication many more jobs will become obsolete in the not-so-distant future.

So why have some manufacturing jobs in the U.S. been growing in recent years, after a virtual moratorium due to outsourcing overseas? Robots.

The demand for robots is rising. That’s because the feasibility of robots is rising.

Costs are falling while wages are pressured higher in key manufacturing regions around the globe. Not to mention: Technology is improving. Robots simply make more and more sense.

Last year two men from Oxford University made a prediction: “47 percent of jobs in the U.S. are now at risk from computerization.”

Does this mean robots are set to wipe out the manufacturing gains in the U.S. labor market? Perhaps to some degree, if the growth in high-skill jobs doesn’t offset the loss of lower-skill jobs. But that’s not necessarily the biggest or most immediate concern.

The breadth of manufacturing in the U.S. is relatively insignificant when compared to its importance elsewhere. Countries where cheap labor has put their economies on the map have the most to lose. The more feasible robots become, the more quickly these jobs become obsolete.

And that could really change the game for global-minded investors.

Certainly, in this increasingly globalized economy and financial system, tough times in one part of the world can emit far-reaching tremors. So on top of labor market uncertainties, add on potential global-macro and financial system risks.

Basically, you have the makings of a very trying situation. That’s not to say the speedy progress in technology and robotics ushers in a doomsday scenario. Rather, the path will be bumpy.

You, personally, may not be at risk of losing your job to a robot. And potential structural unemployment may not completely hold back the U.S. economy. But the same cannot be said for other parts of the world.

If you’re an investor, you’ll eventually be exposed to a broad-market rethink.

With this information, are you going to prepare? Are you going to hedge your bets? How?

You can’t go back and change what may have happened to you as a homeowner during  the last big storm. But today as an investor you can get in on the technology sector to weather the next one.

Best,

JR Crooks

P.S. Whether you own tech stocks or are just now contemplating getting your feet wet, we have expert help for you on the Money and Markets blog.

Our new technology stock specialist — Jon Markman — is standing by to answer your questions! Here’s your chance to ask one of the world’s greatest tech stock experts anything you like about technology stocks: Simply click this link to jump over to the Money and Markets blog. Jon will check in during the day to answer your questions.

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