Market and Earnings Update

Dow J down triple digits (195.84), or 1.13%, while the S&P500 down 27.39 points, or 1.35%.

U.S. stocks edged lower Wednesday, January 28^th, due to the Federal Reserve’s newest policy announcement.  The central bank reiterated the fact that it will be ‘patient’ with raising rates, but that it has some concerns over low inflation.  Inflation has stayed low because of plunging energy prices and a strengthening dollar. 

In terms of how the different sectors performed today, 7 of the 10 sectors in the S&P500 were down.  Energy fared the worse of the 10 sectors with another drop in oil prices, while Technology was up for the day. 

Company Earnings Update:

Facebook (FB):

Facebook delivered quarterly earnings and revenue that surpassed of analysts’ expectations on Wednesday as mobile active users increased some 34 percent.  The company posted fourth-quarter earnings of 54 cents per share, up from 31 cents a share in the year-earlier period. Revenue increased to $3.85 billion from $2.59 billion a year ago. 

Facebook expects mobile usage growth to be the primary driver for its overall user growth.  The following chart displays the significance of their growing mobile usage.

Source: Facebook filings

Qualcomm (QCOM):

Qualcomm stock fell more than 8 percent in after-hours trading after the company lowered its chip guidance for the second half of the year.  The company reported Q1 adjusted earnings of $1.34 per share, compared to Wall Street estimates of $1.25. Revenues for the quarter came in at $7.10 billion, beating estimates of $6.94 billion.

The technology firm said it lowered the outlook on its semiconductor in part because of a “shift in share among [original equipment manufacturers] at the premium tier. Qualcomm’s Snapdragon processor has a major buyer in Samsung, and the lowered outlook may reflect Apple’s share gains in the smartphone market.

Honing in Your Trading Skills

For any novice trader, just getting into the market for the first time, it can be a daunting feat.  Whether it’s looking at the ask and bid prices jumping around every fraction of a second, watching the tickers of thousands of stocks jump around your screen, or seeing numerous news articles on earnings and major events, the stock market is a scary beast.  That is one of the prime reasons why novice traders often lose their heads while trading for the first time.

One way to counter this fear of the speed and action of the market is to keep a stock watchlist of just a FEW STOCKS!  Focus in on a few stocks, get to know everything about them.  Who are the management? When is the earnings date?  How much revenue did they earn last year?  What industry are they in?  Once you have honed in on a few stocks (5-8), and you have gotten to know them really well, then you will have a much better chance of trading them successfully.  Before you know it, you will be able to look at one of your stock’s charts, and have a good guess of where it will be heading.

Another way to tackle the market, which is basically an add-on to my previous point, is to hone in on a specific industry or sector in the market.  Become a specialist in energy stocks, or go even further and focus in on only natural gas and oil companies.  Once you are able to focus in on particular industries, you will realize that you will get to know the industries very well, and therefore will be able to stay on top of the most recent news, leading to greater success when trading.

Four Characteristics of a Successful Entrepreneur

When it comes to becoming an entrepreneur, there are four characteristics that every individual should aspire to possess.  Let’s face it, starting your own business is difficult, and it takes an incredible amount of dedication.  But if you stick with it, and truly believe in yourself, then it is quite possible for you to make a fortune.  Look at the likes of Steve Jobs or the infamous entrepreneur, Bill Gates.  Both of them started businesses out of their garage, and they thrived off of the fact that they were independent, and working for themselves.

More and more people today are turning to becoming an entrepreneur as their desired career path.  With the availability of knowledge and resources thanks to the internet, it has become much easier and more convenient to start a business by yourself.  Shows like the Shark Tank have played an instrumental role in producing the next wave of entrepreneurs, and have successfully kindled a fire of innovation within individuals around the nation.

So, without further adieu, here are four characteristics that every successful entrepreneur should possess.

1. Passion
   
     Passion is not something that you learn, it is something that you either possess toward a specific subject or not.  However, more often than not, individuals can develop a passion with the help of mentors and role models.  For instance, if you enjoy following the stock market, and see Warren Buffett as a sort of role model for your future career, you probably possess a passion for Finance and Investing, and you will probably do anything in your power to be as wealthy and successful as Mr. Buffett.  As Mr. Hunter S. Thompson said, “anything that gets your blood racing is probably worth doing.”

2. Perseverance

     As an entrepreneur, you will without a doubt one day encounter rejection.  It is a fact that many entrepreneurs are aware of and it is something that you will have to endure on your path to success.  Successful entrepreneurs are able to take these constant rejections and use them as motivation for the future.  It is how you encounter and deal with these rejections and any other unexpected problems regarding your business that makes you successful.

3. Confidence

     If you decide to pursue any new venture in life, whether that is a personal relationship, a new occupation, or a presentation, you must possess confidence.  You must have confidence in yourself as well as confidence in whatever you are pursuing.  A lack of confidence can lead to paralysis from fear, and can cause you to fear starting something new.  Confident people are self-starters; they get things done and they don’t live in fear about what they are doing.  It may sound easy enough to be confident, but in reality some people have trouble gaining confidence in their daily lives.  In order to counter this lack of confidence, try this: Once a day, do something with the utmost confidence, however nominal that task is.  Even if it is talking to your professor or colleague, stand up straight, keep your head high, and speak as eloquently and fluidly as you can.

4. Resourcefulness
  
     Any successful entrepreneur will tell you that you have to make the best with what you have.  If you don’t have the necessary capital to start your business, do not see your insufficient capital as a road block, rather see it as an opportunity to reach out for guidance and support from others around you.  Resourceful people dare to make bold moves, they do not fear what they don’t have, rather they make use of what they do have, and they know that even if the road doesn’t take them exactly where they plan, it can often lead to other great places.

Early Year Troubles? Or is It?

So far, 2015 has not been particularly kind to the U.S. Stock Market.  After starting off strong for the first few days of the year, the Dow Jones and S&P500 have taken a turn for the red.  Almost instantaneously, the media raises fear about the market, capturing novice investors with headlines like, “Dow down over a 100 points, down 301 points earlier!”  Well, yes, this is true, but what individual investors need to know is that you can not accurately predict the stock market’s future for the year based on 9 trading days.

After doing some research, I found an interesting fact that may explain why the stock market will not be in the hole for the remainder of 2015.  Any investor who has paid attention to the market’s movement in 2014 can remember that it was a record year for both the Dow and the S&P.  What not many investors will remember, however, is that the market started 2014.. get this… IN THE RED!  The reason investors forgot is probably because the early-year weakness was hidden behind the wall of bulls, that ultimately won over in 2014.

In the chart below you will find the S&P500 for the year 2014, as well as the first few days of this year, 2015.  I made sure to highlight the fact that the S&P went down about 5% in the first month of the 2014.  And, what do you know, the same fear was present as it is now.  There were numerous articles writing about the end of the bull market, and that 2014 was going to be a bear market.  However, there were also articles like this one, here, that said to not pull the plug on U.S. stocks just yet.  Who was right in the end? The bulls.

This year is no different.  The S&P500 is down almost 2% for the year, and there is fear that THIS will finally be the end of the bull market.  It will not be, however, as the fears will soon fade away as the market begins to pick up again, just like it did in the end of February 2014.  Give the market time, as only the most successful investors will realize, a short-term sell-off will scare away speculators, but not long-term investors.

Apple Stock Ready to Breakout?

There have been a whole wave of headlines regarding Apple’s stock, and the possibility of it reaching the $125-130 range.  What I wanted to do with this article was summarize the major headlines and pinpoint which factors are leading to this upgrade in the stock.  Today, analysts from Credit Suisse upgraded Apple stock and put a price target of $130 on it.  This is a large premium considering that Apple’s stock just closed at $110.22 for the day.

The analysts from Credit Suisse raised their earnings-per-share estimates based on “solid and sustainable iPhone volume.”  Apple is expected to sell far more iPhone’s in the year 2015 than what was previously estimated.  The introduction of the Apple watch is also a cause for the upgrade, as Cantor Fitzgerald analyst Brian White wrote in a research note Monday, that he saw a great deal of smart watches at the recent Consumer Electronics Show, but none like the Apple watch.  If the watch can live up to it’s praise, then I am sure Apple will make a killing off of it’s newest gadget.

The Credit Suisse analyst’s projections could prove to be conservative however, as it is said that it does not consider any of the new innovations coming out of Apple in the next year.  Those might include the rumored large-screen iPad, the lower-end iPhone and Apple TV, as well as monetization services like Apple Pay.

Apple’s technicals also look very promising with an apparent downtrend in the mix.  If the price can breakout above the downtrend line and then close above that line, then it will set the stock up for a strong appreciation through the end of the month of January.  However, if the price falls below the lower linear trend line, it could be a few weeks before we see any sort of appreciation worth mentioning.

Apple’s stock will be one to watch in the coming weeks, as a majority of Wall Street will be watching as well.  Most analysts see Apple’s stock reaching the $125-130 range through the end of January into February.  Stay tuned!