Archive for the ‘Investment Talking’ Category

Adding Roku (ROKU) To The Stocks I Follow

By: ispeculatornew | Date posted: 11.14.2017 (6:47 am)

Good morning, today I will be adding one more stock the list of stocks that I follow. As a reference, this is the list of stocks that I follow news about, read earnings call transcripts of and eventually start trading for my long & short stock picks. In this case, I don’t expect to trade ROKU for a little bit as the company just went public and while it has had a promising start, I (almost!) always prefer watching from the sidelines initially as I get a better feel for the company.

Roku is a company that provides a tv stick/digital top boxes that basically provides content to users tv. It competes with the likes of Apple TV (AAPL), Fire TV (Amazon), Chromecast (GOOG) and provides a platform for content companies such as Netflix, Google’s Youtube and so much more. As you can imagine it is an incredibly competitive space but one that ROKU has been able to do very well in. The company has not been profitable on a EPS basis in the past few quarters which is not always a problem but I’ll be curious to see how they can turn things around in this case.

The stock has done incredibly well since its IPO though following earnings where revenues jumped by 40% y/y and the Q3 EPS loss was 10c/share, lower than expected:

Ecosystem Plays Continue To Dominate ($GOOG, $AMZN, $AAPL, $FB, $MSFT)

By: ispeculatornew | Date posted: 04.28.2017 (5:51 am)

For years I feel like I’ve been discussing the “ecosystem play” and I certainly wish I had been able to buy an ETF that held all those plays. In this 2013 post, I didn’t include Microsoft but started including it in 2014 as it became clear it would successfully adapt to this new digital world:

Making The Case For An Ecosystem Play

I’ve also argued that very few other players will manage to thrive in an environment where the ecosystem players are able to leverage their power and users and that theme clearly remains relevant. Yesterday, Google and Amazon both reported earnings and both crushed it. They are all fighting their own battles but each have their own clear strengths.

How are these 5 ecosystem plays doing now? Take a look at the largest companies by market cap as of April 26th:

Of course, once that data incorporates Amazon (AMZN) and Google (GOOG) market gains at the end of the day, the picture will be even more clear. Even Alibaba (BABA) which stands at #10 could also be included in the “ecosystem” play although it would be the Chinese one. Impressive isn’t it? I also expect Facebook (FB) to deliver very strong results next week.

Here is the return since that 2013 post:

The Most Surprising Part? It’s Still Very Early

I’d argue that even though these companies are already the top market caps and have done incredibly well over the past few years, they still have incredible upside. I’ve just written an article about Facebook’s upside that will be published very soon, please sign up to our tech newsletter if you’d like to be notified when it’s out (hopefully later today). My main argument though is that these companies are now able to leverage their power to dominate a long list of industries that are quickly moving online such as software, media, news, entertainment, etc. I’ve argued that some names (notably Netflix) will continue to do well and actually leverage those ecosystems but I’d argue those will be exceptions.

More on the ecosystems to play but I felt like I had to take a look back after looking into the GOOG and AMZN earning details.

Have a great weekend

Adding 2 New Stocks To Stocks I Follow (SNAP, SHOP)

By: ispeculatornew | Date posted: 03.17.2017 (3:00 am)
Today I’m happy to confirm that I’m adding 2 new stocks to the list of stocks that I follow:
Snapchat Inc (SNAP)
Shopify (SHOP)
Shopify (SHOP) is a Canadian based company that has a platform making it very easy for merchants to start selling their stuff online. That means making it easier for merchants to build a website, list their items, process orders, etc. There is of course a lot of competition in the sector but it’s fair to say that SHOP has emerged as a market leader and given the fact that my web company does have items to sell (not on this blog though), I did end up going through their website quite a bit as well as look for competitors. I then spent a bit more time looking at its financials and while I doubt I’ll be trading the company anytime soon, I will start following it, listening earnings calls (or reading transcripts), etc. So you should expect some commentary in the coming months.
Snapchat (SNAP) is a fascinating company. If you exclude Uber and Airbnb, it is the one company I was most looking forward to turning public. There has been an incredible amount of buzz about Snapchat and I’ve personally read at least 15-20 good pieces about Snapchat. As is the case for other IPO’s, I don’t expect to trade the stock anytime soon but I am excited to get going. With LNKD’s purchase by MSFT about to close, we’ll be down to Facebook (FB) and Twitter (TWTR) in terms of listed social media stocks. I know that SNAP considers itself a camera company 🙂 Here are my main takeaways so far:
-SNAP’s user engagement is very impressive I’m much more interested (at this point) about that evolution than in revenues or profits
-SNAP’s user growth is a major source of concern. There is no way that SNAP can livve up to its valuation if Instagram truly stopped or slowed down significantly enough SNAP’s user growth.
-Evan Spiegel, SNAP’s foudner and CEO does so far look very impressive in terms of product ideas and execution. Given SNAP’s listed shares are non-voting, this is a similar case to Facebook’s where SNAP’s future to a large extent depends on Spiegel’s performance. Tough to ask him to be the next Mark Zuckerberg but this will be interesting to follow
Overall, I personally would and will stay on the sidelines for now. I’d be very afraid to be both long and short at these levels until I see a few more earnings/numbers come out.
I’d love to hear your thoughts if any on Snapchat though. Are any of you long? 

How to Turn Investments Into Tax Write-Offs

By: IS | Date posted: 02.17.2017 (12:30 pm)

Investing has many benefits: it supports the economy, breathes life into new ideas and businesses, and can lead to profit further down the line. In general, it’s a very good idea to invest a portion of your savings as early as possible, since the benefits reaped increase as time passes.

While most of these are long-term benefits, there are some short-term benefits as well, such as the potential for tax write-offs. In certain situations, expenses incurred while investing can be written off, reducing the amount of taxes you need to pay each year.

Capital Losses

 

Similar to how capital gains are taxed when investments have gained value, capital losses can be written off when investments have lost value. In this way, capital losses function as the opposite of capital gains. These losses can only be deducted when they are realized, meaning the only way to write off depreciating value of your investments is if they have been sold that year for a lower value than their buying price.

The maximum value of capital losses that can be written off in one year is $3000—any greater losses will roll over into the next year. In the event of a married couple filing separately, that maximum is split evenly between them, so they can only deduct $1500 each.

 

Investment Interest Expenses

 

If you’ve taken out a loan in order to purchase investments or securities, the interest paid on such loans can be deducted as a tax write-off. This even includes interest on loans taken out to purchase property, provided that the property in question derives interest or royalties, or if you take a passive role in the property’s business activities.

The maximum deductible investment interest expenses you can write off on your taxes is found by taking your net investment income and subtracting any miscellaneous itemized deductions, which are outlined below.

Miscellaneous Itemized Deductions

 

This category includes general expenses that are greater than 2% of your adjusted gross income. The main sources of miscellaneous itemized deductions are usually interest on home mortgages, charitable contributions, and taxes from property and income. However, certain expenses relating to investments are able to written off in this category as well.

As investments are considered by the IRS to be income-producing activities, fees incurred through the investing process can be deducted if declared as such on your tax forms. Some deductions that can be written off include custodial fees, clerical and attorney costs, and fees for transportation and safety deposit box rentals.

Investment expenses that count as miscellaneous itemized deductions:

 

  • Attorney costs for collecting taxable income
  • Accounting costs for collecting taxable income
  • Expenses for owned real estate that collects income
  • Rental fees for safety deposit boxes
  • Subscriptions to finance-related publications
  • Costs from transportation to financial advisors and brokers

Conclusion

 

Taxes are an unavoidable fact of life and can be very stressful when they sneak up on you. However, just as there are a seemingly limitless amount of taxes that are charged on your assets, there are many ways to write off these taxes as well. Losses incurred through investing can easily turn into a short-term boon, and may eventually become tax breaks in the years to come.

In addition, standard operating costs to acquiring and maintaining successful investments can be written off, however miniscule these write-offs can seem. Several small tax write-offs do add up, and the money saved from these breaks can be used to pursue future investments and increase the value and diversity of your portfolio. However, it is still important to consult with a tax professional before pursuing any of the potential tax breaks outlined here.

Christine Sato founded the CPA Review Courses website – an online resource dedicated to helping professionals pass all four sections the CPA Exam on their first try. Christine provides reviews of best cpa study materials and gives expert cpa study tips to ease the process of becoming a CPA.

 

Updating The Stocks I Follow

By: ispeculatornew | Date posted: 12.01.2016 (7:01 am)

twilio_logo_01Today I’m (finally!) updating the list of stocks that I follow. There have been a few different changes so today I’ll discuss stocks that I’m removing, adding and ones that will be added in the near future if all goes well.

Youku Tudou Inc (YOKU) was taken over by Alibaba (BABA) earlier this year which in a way was not a big issue because I’ve mostly stayed away from trading Chinese tech stocks but I did like the idea of being able to eventually trade a pure video play.

Monster Worldwide (MWW) was acquired by Randstad Holding. MWW was a stock I had consistently shorted as I see it mostly as a company that failed to adapt to a changing internet and will continue to struggle with the likes of LinkedIn and even

Rackspace Hosting (RAX) was acquired by a group led by Apollo Global Management LLC and Searchlight Capital Partners UK LLP. It was a stock that I had shorted despite being a very interesting company but remained overvalued in my opinion.

Demand Media (DMD) was acquired by Leaf Group Ltd, it was a stock I had mostly stayed away from because of the challenge in trying to value it. DMD owns a lot of different sites such as eHow.com which probably are seeing a slow steady traffic decline and I doubt that will change. It was a bit of an IAC Interactive (IAC) style of company but with less growth and not as much in terms of interesting divisions.

Stocks That I’m Adding:

Twilio Inc (TWLO): Twilio is a company that went public this summer and that I would not be trading right now because I want to better understand its business. the company develops and publishes internet infrastructure solutions that allow web developers to integrate phone calls, IP calls, text messages and more. Its customers include Uber, Airbnb, Netflix (NFLX), Coca-Cola (KO), Salesforce (CRM) and more. Not a bad list right? The other reason why I’m waiting is that I try to wait a few quarters of earnings, calls, etc to better judge a company. That is probably even more important when discussing a company that has fast-growing revenues but is losing money. If you look at these charts of revenues and EPS you will see exactly what I mean:

twlo_chart

twlo_chart-1

Trivago (TRVO): Trivago will be a newly listed company, that is being “spun out” of Expedia that will be added to the stocks I follow as soon as it launches.

Snapchat Inc (SNAP): Snapchat will be the most fascinating tech IPO (it filed a confidential IPO) in a long time and I’m very much looking forward to the stock listing. Why? So many reasons:

-A Pure “Social” play that can be compared with Facebook, Twitter, etc

-I’d love to see revenues and EPS be “disappointing”. increasing opportunities for profit

-The company has been executing tremendously well on a longer term strategy

A New World Order Will Generate Opportunities

By: ispeculatornew | Date posted: 11.27.2016 (7:50 pm)

The past few months have been signs that things are changing quickly in geopolitics and this will certainly continue to provide massive opportunities. Take the surprise Brexit vote where a majority of the population voted to “exit” the European Union. This vote generated massive swings in currencies, equities around the world not only in the following hours but also since then as announces are made. Recently, an announcement that the Brexit might actually not happen ended up moving the British pound significantly. Of course, if you think about the British people you might certainly have sympathy. Will traveling around Europe become harder with Brexit? Possibly, but there will continue to be many ways to get around it. I think the main takeaway from my perspective is that while some of these moves might not be good over the long term, they will generate more volatility and wild swings where you and I will be able to come in and profit from significant trading opportunities. Renew your ehic to increase your odds.

Another trade I had personally made was buying a Russian ETF when the Obama administration went ahead with some major financial sanctions. It’s always extremely difficult to time such moves and for a short time period it did look like I might lose money but over time the Russian market (and mostly the Ruble) recovered making me a nice profit.

eww_chartAnd Then There’s Trump

If you’re looking for these kind of opportunities, it’s fair to say those might happen under newly elected soon-to-be US President Donald J Trump. He’s been willing to take bold positions and has been going back and forth on several of them. Given the importance of a US President, he’s likely to not only impact single countries (just look at the chart for EWW – iShares Mexico) but also sectors depending on decisions he’ll make on the environment, on policy towards moving jobs abroad, etc. We’ve already seen some stocks do very well (Caterpillar, pharmaceuticals, etc) and are likely to see a lot more of that over Trump’s 4-year term.

There Is Risk Involved

Of course, there is significant risk involved but the way I try to play these in general is to bet on the market overreacting in the short term over moves that will not have a lasting impact. The has played out time and time again and I would bet we will continue to see more great opportunities in the coming months.

CFDs Explained

By: IS | Date posted: 09.21.2016 (1:50 pm)

The next Federal Open Market Committee (FOMC) meeting will occur in late September 2016. There have been many arguments both for and against an interest rate hike in September. Now, whether the Federal Reserve decides to raise or leave the Fed funds rate, major market indices should be affected. The Standard & Poor’s 500 Index (S&P 500), Nasdaq-100 Index and Dow Jones Industrial Average should react to the Fed’s decision in September. Now, instead of trading options, futures or exchange-traded funds (ETFs), some market participants may want to consider contracts for difference (CFDs). Now, some may be wondering what CFDs are and how these products function.

CFDs Explained in Brief

A CFD is a tradable financial instrument that seeks to mirror its underlying asset’s movements. Now CFD trading is less costly than trading options, futures or ETFs, since CFD investors and traders do not have to own the underlying asset and are not obligated to do so.

CFDs allow market participants to speculate on market prices, regardless of the direction of the underlying asset. For example, if an investor is bullish on the S&P 500 Index, the investor could purchase CFDs tied to the index. Consequently, the investor would benefit from a rise in the S&P 500 Index. Conversely, if an investor is bearish on the S&P 500 Index, the investor could sell short CFDs tied to S&P 500 Index, therefore, the investor would benefit from a fall in market prices. Therefore, risk tolerant investors who understand the product could use CFDs during the next September FOMC policy meeting.

Arguments for Fed Funds Rate Hike

Goldman Sachs’ Chief Economist Jan Hatzius is one of the few economists who believe the Fed will raise interest rates during the FOMC’s September meeting. Jan Hatzius argues that the U.S. economy is adding jobs at a pace that is satisfactory for many members of the FOMC to vote for an interest rate hike in late September. Although the August U.S. Employment Situation report came in weaker than expected, one month’s disappointing numbers does not reflect the overall trend.

Federal Reserve Chairwoman said, “Indeed, in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months,” at the Jackson Hole, Wyoming annual summit.

Moreover, Hatzius stated, “Growth in nonfarm payrolls was weaker than consensus estimates at +151k, but above the pace Fed officials typically consider sufficient to hold the unemployment rate steady over time—the so called ‘breakeven rate … we therefore see this report as just enough for a large majority of officials to support a September rate increase. We have therefore raised our subjective odds of a hike this month to 55% from 40%.”

Although the U.S. economy only added 151,000 jobs in August, which was well below consensus estimates, the moving average over the past three months is an average addition of 232,000 jobs. Consequently, the risk of a recession occurring over the short term is low and the Fed could raise rates.

Arguments Against Fed Funds Rate Hike

Conversely, there are economists who believe that the Fed is unlikely to raise rates in September. Canaccord Genuity’s chief market strategist said, “I don’t think they’ll hike in September … the economic cycle is not about duration. The economic cycle is driven by Fed policy, short-term interest rates, which create strength in the long-end of the curve.” With all this chatter regarding interest rates, it’s difficult to discern whose arguments are stronger. Either way, investors should be gearing up for the potential Fed rate hike.

As stated previously, it is expensive for some investors to purchase options and futures on the overall market. Investors who wish to place a trade on whether the market will go up or down could place trades on CFDs related to the Dow Jones Industrial Average, S&P 500 Index or Nasdaq-100.

 

The fastest growing businesses in 2016

By: IS | Date posted: 08.12.2016 (1:37 pm)

 

Despite the perils of Brexit, the fragility of the British pound and continued financial uncertainty in many markets, companies continue to drive forward with their business plans. Many success stories are making the headlines this year, as businesses innovate and diversify to uncover new products or business synergies to explore.

Leading the way, as is common, are the IT and technology-focused companies. A new trend for the year are smart artificial intelligence bots, improving customer interaction and automation. Led by the likes of Facebook, Cisco, Microsoft and many startup companies, they are helping bots take over on customer service phone lines, websites, in-store kiosks, reception areas and other locations to help people find the information, advice or products they need faster. Bots in the office can help staff find business documents, plan travel and find the lowest cost products or those that can be delivered fastest, all in a matter of seconds.

Another area of growth is communication services, with unified communications allowing workers to make themselves available by the most appropriate means, be it a traditional phone, voice over IP calls, mobile, chat or video message. A unified communications service can save a company on capital expenditure and expenses on its phone bills, line rentals, communications equipment and so on.

The final fast mover from the technology world this year is personal health, with a wide range of smart weighing scales, health and heart rate monitors, and smartphone apps all encouraging consumers to be healthier and stay fitter. Fitness brands are leading with the likes of British firm Under Armour and its new Healthbox, but smaller companies can find niches and appeal to specific demographics.

Perhaps in relation to that, many traditional businesses are also thriving in 2016. Health clubs and gym memberships are on the rise again, while many small businesses are starting up their own niche healthy living ranges like office-based exercise products . Finding a new type of exercise or one specifically for a particular age group or the time poor is one of this year’s major opportunities, encouraged by health insurance benefits and rewards. ‘Corporate wellness’, as the sector is known, benefits from many of these initiatives, as businesses try to encourage their staff to be healthy for a better working environment, less time off sick and improved morale. Any company investing or innovating in these areas will find plenty of opportunities in this and coming years.

Is Tech Making CFD trading Better or Worse?

By: IS | Date posted: 07.06.2016 (6:00 am)

CFD basically stands for Contract for Difference. CFDs are derivative products that are contractual. The parties involved in CFDs are usually two. There may be a buyer and seller. The nature of the parties involved varies in this regard. What this means is, depending on the contract, the parties involved could also be a client and broker. CFDs usually reflect the movement of the asset that underlies it. When the asset moves in the financial market relative to the position taken, profits or losses may be realized. The asset itself is never owned by any of the parties involved.

The CFD centers on a binding agreement that the buyer will be paid by the seller the difference between an asset’s value at the time of the contract and its current value.

With CFDs, traders can benefit from the upward movement of prices in what is known as long positions. Even when the prices move down in short positions, traders can take advantage of the financial instruments underlying the particular derivative.

Is Tech Making CFD trading better or worse? The answer to this question is a resounding yes. There are a number of mobile and online trading platforms and software available. Financial giants like CMC Markets have been trendsetters in the technological aspects of CFD trading. Despite these technological advances in CFD trading, traders are still reliant on the behavior of markets and strategies that are employed when trading.

Practical and Effective Trading Tools

Modern CFD trading platforms have great trading tools and features to assist traders. These tools provide accurate analyses and real-time CFD trading news items.

Reliable Real-Time Data and Information

Online and mobile CFD trading platforms provide CMC Markets and Reuter’s News insights. Such insights are quite reliable and ensure that the trader is kept well informed of emerging trends in CFD trading.

Pattern and Trend Monitoring

Technological advances enable traders to use features like pattern recognition scanners. The scanners automatically detect any common patterns that are exhibited by the CFD trading market. This enables traders to make accurate trading decisions that are informed.

Technology also enables traders to access valuable and useful economic calendars on a real time basis. Such calendars are developed and powered by reliable CFD market trackers like Dow Jones. With economic calendars, traders are able to make trades based on established and reliable timelines that are dictated by current economic events. The calendars also allow the trader to be able to determine which particular economic event will affect their CFD trading and at what particular instance.

CFD trading benefits greatly from advances in technological fields in that a trader can make use of features like advanced order tickets when trading. The trading platforms also have integral price ladders. These ladders are able to indicate the extent and depth of various CFD prices.

Traders are also able to access economic announcements, briefs, technological patterns and CFD trading price alerts. Technology has ensured that CFD traders are able to closely monitor trends in the market. The tools also analyze CFD trading trends for the traders and eliminate the hassle of doing so.

Customizable Interfaces

CFD trading platforms are designed to be customizable. The trader can tweak the platform to suit their individual trading preferences and needs. The tools and features in the CFD trading platform can be organized using a variety of intelligent layout formats. The trader is also able to store the particular layout that appeals to their particular trading style.

Client Service

In case the CFD trading markets are still open at whatever time of day, traders have access to great client support services online. These services are quite useful in case the trader has a query or needs to resolve a particular trading issue.

With CFD trading, technology has been greatly beneficial and has changed the way traders’ trade using CFD financial derivatives.

Comparison Charts

CFD platforms typically have advanced charting tools with a number of preset candle patterns. They also have technological indicators that show various CFD parameters in a concise and accurate manner. The online or mobile CFD trading platforms also have a variety of charts and comparison charts.

Is Tech Making CFD trading better or worse? It is quite evident that CFD trading has benefited greatly from technological advances. These advances have enabled traders to trade more efficiently and effectively. Online price comparisons and analyses enable traders to make informed decisions. Technology has revolutionized CFD trading in a positive and beneficial way.

 

Spotting Trends: The Growth of Fintech

By: ispeculatornew | Date posted: 06.27.2016 (8:35 pm)

The financial services industry has always tried to embrace new technologies in order to offer additional convenience to customers and operate more efficiently. But in recent years with the rise of cloud-based apps and mobile technology, there has been a new wave of technological innovation that is driving growth and launching promising new businesses in the financial services sector: this is the rise of fintech. The fintech industry has become one of the most exciting industries for investors and technology enthusiasts because the rise of new financial technologies is making it possible for banks and financial firms to offer new levels of convenience, efficiency, cost savings and even the ability to develop entirely new financial products that were never possible before. Fintech startups are finding new ways to process payments, collect donations, and loan money – and they’re doing it with online software and an emphasis on speed, convenience and mobile technology.

Here are a few of the reasons why the fintech industry is worthy of its recent buzz:

The Financial Services Industry is Ripe for Disruption

The financial services sector is often thought of as being a slow-moving, heavily regulated industry that is full of big, entrenched players, making it slow to change. However, the truth is, financial services is one of the industries that is most prepared for disruption by innovative outsiders. According to a survey of Inc. 500 CEOs, financial services was rated #2 of the top five sectors that are ripe for disruption (#1 was health care). The established big banks should not be too smug and complacent – many small companies are looking for new ways to deliver financial services more efficiently and in a way that better serves customers, and customers are starting to notice that there are excellent online tools available to process payments and manage other banking tasks.

Fintech Cuts Costs

A recent article from The Economist found that online lenders (some of the most prominent fintech startups) tend to have a much lower cost structure than traditional banks. For example, online lenders typically have business expenses that are only about 2 percent of their average outstanding loan balance, compared to 5-7 percent for traditional bank lenders. Fintech firms are typically able to reduce costs because they often operate online, without the costs and bureaucracy of a traditional bank’s network of brick-and-mortar branch locations. Lower costs make it possible for online lenders to issue loans more affordably, or serve a broader base of customers who might not have been able to get loans from a traditional bank.

Consumers are Ready for Fintech

People love their smartphones, and mobile apps have quickly become the everyday assistants of billions of people all over the world. People are using their smartphones and mobile devices to research products, shop online, and exchange confidential information about health care, insurance and many other aspects of their personal and financial lives – so why should financial services be any different? Consumers (and small business owners) are more comfortable than ever with online banking, mobile technologies for financial services, and other key trends in the shift to mobile marketing. This presents a huge opportunity to fintech firms.

For example, an article from the Financial Times found that transaction volume at traditional brick-and-mortar bank branches has decreased by one third in the past six years, as consumers are starting to do more of their routine banking business via online and mobile banking. The Adobe 2015 Mobile Consumer report found that 75 percent of Millennials and Gen Xers want to do online banking each month, more than 20 percent of Millennials (and 14 percent of Gen Xers) say that they want to apply for banking products online, and more than half of U.S. and U.K. mobile consumers would like to use mobile-only banking services.

The rise of fintech is keeping with several other key trends: the rise of mobile technology, the innovation of online software apps, and the growing appetite of consumers for more online and mobile banking. Anyone who is interested in seeing the latest opportunities for business growth and the evolution of the consumer economy should pay attention to the continuing rise of the fintech sector.