Apple Proves Value Investors Like Tech

Many people know my personality is similar to my investing style...I tend to go against the grain.  As a techie, I don't love the Apple phones for a technical reason it's a closed source ecosystem. Unlike open source devices, Apple prefers that you use only their software and products. I have to remind people that Apple did not invent putting things in the cloud, sending files/messages should be something you should be able to do to any phone, and chargers are meant to be universal.

But in order to be a good investor your personal preferences should NOT interfere with buying stocks.  While I don't own the phone, I don't dismiss many people around me use the phone. Or the fact that iTunes gift cards are a normal gift around the holidays without even asking me if I am an iPhone owner.  But these aren't the reasons why I decided to stake a claim in the value play a few years ago.  Many forgot back in 2016, Apple was trading under $100 dollars and there was fear they wouldn't be able to break into China and growth had stalled.  But as Apple continued to reinvent itself, I saw value in a company starting to pay a dividend, expanding internationally, and growing a profitable services and payments business. So when there is fear in the water you stake a calculated claim on an old dog that still has a few tricks.  Being in Risk Management, I had fun analyzing this stock and pulling the trigger when everyone was saying I got in too late. At an average of roughly $93 dollars, I was betting on a growing dividend, growth in China (maybe India), apps being the future (including iTunes), and logical determination that Apple phones would become larger as I knew people would share my frugal sensation over phone/tablets or phablets if you prefer (why have one of each when supersized phone does the trick).  I am not placing a big bet on Payments yet because I tend to know a little bit about this space. While people love the technology...I think there needs to be one wallet that can travel with you as you change from an ApplePay, SamsungPay, GooglePay....and merchants are CHEAP so it will be a very long time until every store and gas station pay for upgrade technology that supports these new types of payments.

Many say value is dead but I argue, you have to look in the right places. I just read an article about how Warren Buffet and Berkshire are enjoying the amazing gains of Apple. I laughed because I'm wondering if the pupil is finally learning from the teacher...looking back I bought Apple prior to when Berkshire made their purchase:

Post Mentioning Apple:
https://urbanomics.blogspot.com/2016/10/how-to-invest-in-clinton-trump-election.html 

Wall Street Journal: Buffet Bet Big on Apple


This has also happened with Teva Pharmaceuticals recently so I hope to keep the streak alive and maybe may a few future recommendations...one Oracle to another. :)

Peeling Back the Details on Taxes in America...

Excerpt taken from the Wall Street Journal:

According to a letter Mr. Buffett sent to a Republican congressman on Tuesday, the Berkshire Hathaway Inc. chairman and chief executive disclosed that he made almost $63 million last year, yet paid less than $7 million in federal income tax.

Mr. Buffett long has urged lawmakers to raise income-tax rates on the wealthiest, arguing that his secretary paid a higher effective rate than he did last year.

Please head to the Wall Street Journal to read the rest of this article and the details about how different income levels are taxed. Click below:

Buffett Pays Less Taxes Than His Secretary!

I'm curious, on what people's thoughts are on his disclosure about the tax disparity.  It makes me want to think long and hard about becoming a full time investor as the benefits of deductions and less income being taxed could be pretty nice. Please post your thoughts.

Reader Response - Berkshire Hathaway

Fred's comment:

I would have to agree that Buffett is the MJ of investments. No doubt BNI is pleased with the attention. Your love and knowledge of BNI is clear, so would you say that Buffett is trying to position Berk Hathaway for a takeover? (This article from NewsVisual makes a case for it: http://www.newsvisual.com/newsvisual/2007/08/as-berkshire-up.html ).

Urb Reader Response:

Fred, I wanted to say thanks for reading the article and throwing a very good question into the hat. After reading the article, it does make an interesting viewpoint on the many connections that BRK has with BNSI. However, I will use that same article and take a slightly different stance. I don't think that Buffett will buy BNSI because of the following:

- He has made multiple purchases in the sector and a quick SEC search will review his ownership in Union Pacific (10.5M shares) and Norfolk Southern (6.4M shares). I view these purchases as Buffett being bullish on the sector as a whole. Another long shot viewpoint could be he may try to use his influence to stir up further synergies amongst the companies. I would even say a possible merger, but I am unsure of the regulatory scrutiny over that type of transaction in this very mature industry.

However, I recently learned that Buffett had added an additional 845K shares to up his stake to 15% today. This again is another bullish sign for long term buyers.

Aug 28 - Urb Play of the Day

Have you witnessed greatness? How about Jordan... his "Airness" has had numerous moments where he has dazzled us. Taking off from the free throw line and flying through the air... his ability to defy gravity has often left me speechless.

Then you have the Michael Jordan of the investment world, Warren Buffet. His investment company Berkshire Hathaway continues to amaze us with timely investments that dazzle us with their ability to find companies with hidden value right underneath our noses.

Finally, some say I have come along and given hope where there was once despair. I have brought two worlds together, that some say couldn't exist. I know its difficult mantaining my natural swagger and love for hiphop and still dominating in the investment world. It's kinda like P-Diddy being your stockbroker you wonder could it ever be possible.

Now whenever I have a big investment, I have always told you to "Back That Thang Up"...ala Juvenile and buy tons of this stock. Well, I am releasing my Soulja Boy pick and telling you to "Crank That" and "Superman this Stock". I know... some faithful readers have been lost in translation but here we go. Crank That is my new reference loading up on a stock that I absolutely love. I am gonna superman this stock and give it a rating worthy of super hero status.

URB PLAY OF THE DAY:

"CRANK THAT" PICK -----> BURLINGTON NORTHERN SANTA FE (BNI)

I recommended this stock almost two weeks ago on strong momentum at the time. This was a time when most folks thought the sky was falling because of the subprime jitters in the market. The Dow went from an all time high at 14000 (See Dow Take a Bow) to skidding belowing 13000 in a matter of weeks (See The Dow and Beyonce's Fall). I still believe that the financial sector is in trouble but I won't rest until I find the best stocks out there. And boy have we found one. Go back to my post two weeks ago and you will see why I love BNI (See Balling on Wall Street Shopping List) . I disclosed then that I recently bought the stock at $79 and in the face of a deteriorating market watched it shrink down to $76, where I loaded up again. It was hard decision to make at the time but I played Soulja Boy's "Crank That" and it got me through the rough times. I was looking at my screens again tonight and all I can say is I love BNI, like a FAT KID LOVES CAKE. I promise you this stock opens higher tomorrow morning on more momentum.

And you keep asking who the heck is Soulja Boy and what does he have to do with my picks, well check him out here: Soulja Boy "Crank That"