Apple China Update & Friday Update Resend
Dear Subscriber,
We had a delivery snafu with our email provider on Friday's Update--usually, we get 95% open rates on Alerts--this one just 68%. I know it was V-Day on Friday and President's Day today...but still.
#1 The most expected news in the global tech world came in about 60 minutes ago: Apple issued a press release telling us what anyone with a working cerebral cortex already knows-- they are going to miss Q1 2020 guidance because of the China epidemic. Gosh...really? From the press report:
The company cited global supply constraints for iPhones and lower Chinese demand as a result of the coronavirus outbreak. Q1 is ALWAYS Apple's slowest month--post-holidays et al. With the Lunar Holiday cut back in China and 60 million people quarantined, a miss and guide-down were 1000% guaranteed.
Apple said in late January that it expected revenue of $63 billion to $67 billion in its fiscal second quarter.
Apple does almost 25% of their total gross revenue in China so with say a 40% decline in $15 billion of fiscal Q2 China sales, we are looking at a $6 billion ONE TIME miss
In an email, Cook mentioned Apple’s teams working on the fallout from the virus and said that the safety of employees, partners, and customers is the company’s central concern.
Here is the memo, which was obtained by Bloomberg News:
Team,
The response to COVID-19 has touched the lives of so many in the Apple family, and I want to thank everyone for their dedication, empathy, understanding, and care. Today, we more than doubled our donation to support the historic and global health response.
Our paramount concern is with the people who make up Apple’s community of employees, partners, customers, and suppliers in China. I also want to recognize the many people across our teams who have been working around the clock to manage Apple’s global COVID-19 response with diligence and thoughtfulness.
Corporate offices and contact centers have reopened across China, and our stores are starting to reopen, but we are experiencing a slower return to normal conditions than we had anticipated. This afternoon, I shared this update with our community of shareholders and investors to note that we do not expect to meet the revenue guidance we provided for the March quarter. Outside of China, customer demand across our product and service categories has been strong to date and in line with our expectations. Apple is fundamentally strong, and this disruption to our business is only temporary.
Our first priority - now and always - is the health and safety of our employees, supply chain partners, customers, and the communities in which we operate. Our profound gratitude is with those on the front lines of confronting this public health emergency.
Tim
Action to Take: WAIT for the Black Box/Algo trading to rush in at the market open.
#1 We closed out our 02/14/2020 AMD $50 Calls Buy Under $3 from 2 weeks ago at >5$!
Well we did not get to $60 on AMD's expected beat, but $10k into the $50 calls >$3 was 60% or $6,000 in Valentine's Day profits--I'll will take that profit any day! Buy your sweetheart something nice for tonight (note: my wife of 34 years and I do not fall for Valentine's Day premise--we try to treat each other special every day!).
New Target Prices AMD and NVDA
With the stellar earnings Q4 and Q1 guidance reported in the last week, we have updated our earnings growth assumptions for the two top-performing stocks in the S&P 500 for the last three years (AMD 2018/19 and NVDA 2017):
New AMD Target: $75
New NVDA Target: $350
PS--what to do with some of your profits? Don't miss out on a VERY special one-time ever offer at the bottom of this update to be one of the only 50 current subscribers to add a 5-year subscription to BOTH TR Pro and $10k-a-Month Investment Income Club newsletters PLUS 7 fabulous additional services YOU ASKED FOR for just $495!
OK, back to making some serious $$$.
#2 Buy AMZA Under $4.05 or better with $5 target...Again!
In the $10K-a-Month Investment Income Club Portfolio we doubled down on AMZA at $4 in January--and we are a round trip back again (I did take some profits when it jumped 15% in a month I cannot lie)!
But IF you did not double down before, or just want more monthly income I strongly urge you to do it now.
Bottomline the <$50 oil price is NOT SUSTAINABLE when China comes back online and while 300+ public and private US energy frackers are in desperate financial shape and working for their lenders (I'll get into this much deeper in the upcoming newsletter). The 72 cents per year/6 cents per month 98% covered AMZA dividend is rock solid here (with call option selling in the last few weeks that dividend could very well be higher--just speculating).
I literally have emails from multiple subscribers who tell me they are long 100K AMZA shares and now earning $6,000 a month with $4 ish cost basis--that sure beats working! With the $4ish cost basis, the risk/reward value is insane. In my income account I doubled down again today--I will be at 100,000 shares soon, too.
FACT: We investors just don't get mispriced opportunities like this very often in life folks--and think of what an extra $6k per month is like--it's a monthly paycheck you get for doing absolutely nuthin!
My AMZA + PFFA System= A SERIOUS Monthly Paycheck!
Here is what I do with PFFA and AMZA and recommend you do, too. 1) I load up on PFFA with any profits I take in our TR Pro ultra growth positions up 1500-2500% (like some AMD and I sold a little NVDA in my account at the surge open this morning) or my options trading account and then I buy AMZA under $4.15 with those proceeds. I did the same with some NEWT profits I took--proceeds going into PFFA paying almost an 11% yield and I wait for AMZA to get down under $4.15 or better (the bottom has been $3.86 hit twice in last 90 days BTW) and MAN that monthly dividend check is getting sweeter and sweeter!
I'll get into our oil price forecasts in next NL...but $50 is the line in the sand for the lenders that finance US oil production. Since the US has become THE marginal seller of oil and natural gas to the world, when lenders stop lending to rapidly depleting fracked hydrocarbon drillers, supply comes OFF the market. When China returns to normal, oil and nat gas imports return to the world's largest importer of oil and natural gas, ok?
Advice--TAKE ADVANTAGE of the people who are freaking out. Investing sometimes is just the law of the jungle.
#3 New NVDA Target Price: $350
We were waiting for NVDA to report--and they, of course, killed it--especially in the hyperscale data center sales (as we projected). The call options were REALLY expensive (there was more exotic option spreads available but TR Pro is NOT an advanced options trading service folks--yet!).
Congrats to all the NVDA holders--I know many of you have owned it since $25 in November 2016--took 600% profits in late 2018 on the Bitcoin rush (that juiced the stock to unsustainable heights). We reloaded at $125 ish and have another 230% profits now (plus we did some pretty awesome option trades and double downs along the way).
Again the new target is $350. Waiting for the next pullback or correction to go HEAVY and long with 2021 options.
The Big Picture of the Industrial Revolution 4.0 Wave That We Have Been Riding to 65% Annual Returns and 16% Average Yields!
IN SHORT--if any of you are still nervous about the 30-40% secular growth in hyperscale data centers that hold enterprise cloud-based computing applications + power the 40% secular growth in cloud-based AI/Machine Learning/Data Analytics and the GPU/CPU semiconductor engines NVDA AMD (and a few others like Intel), I hope these results have made you comfortable with our primary 2020-2025 transformity investment thesis.
The global corporate world is undergoing the 4th great industrial revolution 2020-2030 with the cloudification of data analytics, applications, machine learnings, AI, and digital enterprise and SMB business processes. Throw in genomic and gene-based medicines that use massive AI and data analytics to CURE genetic-based disease and the advent of electronic vehicles and AI/machine learning-based self-driving autonomy arriving in 2025 ish (sorry for the TSLA miss--but who imagined its explosion from being 3 months away from a $2 billion cash call!) and you understand why the nuts and bolts and software that enables this mass global transformation just keep getting more market share and more valuable!
You and I are living in the middle of a $50+trillion IR 4.0 transformation/transition that is unstoppable for this decade.
Soon we will add Internet-of-Things (IoT) plays and 5G plays as 5G become more viable. Note: the biggest issue holding back 5G is not technology--the biggest issue is the need to get permits to tear up urban streets to add new fiber-optic capacity in urban areas. With 1000 foot range, the 5G wireless antennas all need a new fiber cable connected to them. China is leading the 5G rollout because its CHINA--they have no stinkin' city planning department approvals and public hearings.
Mark my words here: there are a LOT of "OMG 5G--it's a $15 trillion market--buy this one tiny stock and retire to your own private island" bullshit hype in the investment newsletter world. If I was still a Group Publisher with Phillips Publishing and founding member of InvestorPlace.com I would be hurling that FOMO shizzle every day.
But the 2020-2030 cloud-based digital transformation and business process reinvention cycle is powered by SILICON not 5G or the internet-of-things. And just like many of us got rich in the 1995-2000 internet bubble buying the nuts and bolts enabling IP (remember Qualcomm, Dell, JDS Uniphase, Cisco, etc.) the most valuable IP driving this Industrial Revolution 4.0 is the semiconductor IP and then the dominant digital cloud-based enterprise process software.
The reasons are simple: "unit economics," "subscription-based software revenues", "sales-per-employee" and operational leverage. If you are not familiar with these economic terms, 1) look them up 2) paste them into on page 3) print that page out and keep-it-handy when the stock market is undergoing its every 6 months or so 10% bull market correction.
I'll get into this most important issue deeper in the newsletter we are preparing over the long weekend, but don't kid yourself when it comes to ultra-high growth investing in 2020-2025: our growth portfolio did not average 65% annual returns in 2013-2019--the #1 annual return for EVERY investment newsletter in North America (as tracked by the Hulbert Digest) by "looking for value" companies that, in fact, had their business models obliterated by new digital-first competitors or new digital/semiconductor breakthroughs.
Our first-in-class returns come from going DEEP into the best world-class IP owners powering the Industrial Revolution 4.0. If you want market returns, buy the QQQ and wake up in 10 years--we will have doubled your returns ever two years.
We have also done VERY well on specific corporate transformation opportunities (can you say Cloudera?) and I am looking at one transformation that looks like a 300-400% winner.
But don't fall for the 5G BS hype--EVERY successful growth company in 2020-2025 either has IP that enables the Industrial Revolution 4.0 or leverages the technology that created IR 4.0. There will always be fad/cult stocks like Tesla/Beyond Meat that are just pure speculation (and yes when I missed an option trade in my trading account on TSLA because I was sleeping on a plane BOY was I pissed off!!!) but its the IR 4.0 enabling technology owners and innovators and new business model inventors and biotechnology breakthroughs that grow the most valuable and make you a 1%er!
PS--what to do with those AMD/NVDA/CLDR/NEWT profits--from owning #1 Performing S&P 500 stocks in 2017, 2018, 2019 and subscribing to the #1 Performing Investment Newsletter that has beaten 99.99% of EVER Hedge Fund and Mutual Fund in the world??
Here's my suggestion--take advantage of our NEVER AGAIN 5-Year $495 All Access subscription deal--it will only be available to first 50 subscribers who jump on it first--that's it.
Why become a Transformity Research All Access Member (besides saving 50% off the annual renewal rates?).
Well, because we asked over 400 TRPro subscribers what they wanted from TR PRO that we were not giving them now. From that survey, we created the Transformity Research All Access Membership to make their Transformity Research dreams come true!
7 BIG VALUABLE HIGH ROI Reasons Why You Should Become a
Transformity Research All Access (TRAA) Member TODAY:
1) TR PRO All-Access is a ONE-TIME NEVER AGAIN 5-Year Subscription Offer to BOTH our #1 rated Transformity Investor PRO + $10,000-a-Month Income Investor Club. At $495 that's a 50% Discount. I guarantee that when we move our two services to a large financial publisher (active discussions with multiple parties on-going) that deal with be $2,000 a year I promise.
2) Because most of you asked for it, TRAA members will get exclusive 24/7 access to TR staff via our new private Slack Channel! On our exclusive members-only Slack channel, you will have access to the research we spend $30,000+ per year to subscribe to plus have access to our SME (subject matter experts) network (now over 8,000 on Linked-In)
3) Because most you asked, TRAA members will also get direct personal E-mail/Text Access to Tobin Smith to answer your most urgent or important questions (that is why we limit TRAA to 50 members capiche?)
4) Because you asked for it, TRAA members will exclusively get Monthly & Market Emergency Conference Call access where every one of your most burning questions will be answered (and transcribed into text and emailed)
5) You will generate 30-50% MORE INCOME per Year from $10k-a-Month Club Monthly Dividends from our Unpublished Covered Call Option trading alerts. These are trades that I do in my personal portfolio to generate insane amounts of free money from selling call and put options against existing positions at the most profitable times. Just like the InfraCap portfolio managers do in AMZA and PFFA, we have developed an AI-based system for taking advantage of big juicy call option premiums that are just too easy and profitable to miss!
6) As a TRAA member, you get preferred access to our limited attendee Transformity Investing Investor Conference in beautiful and warm Scottsdale (coming next year in early March)
7) And perhaps the most valuable perk of all: An exclusive invitation to join the Smith Crew on our next World of Wine, Dine and Culture Adventure trips limited to 18-20 people (warning: we DO INTERVIEW applicants before accepting!) Over the last 20 years, we have been to almost every fabulous wine/gastronomic/cultural regions of the world except for Australia/New Zealand and the Rhine Valley (coming soon!). But the next trip looks like Montevideo, Uraguay/ Buenas Aires and Mendosa Argentina (with an extended repeat visit to Cusco & Machu Pichu for those who missed our last visit) in the Fall of 2020.
The best part of our trips all over the world is the many lifelong friends we have made with our subscribers (and our guests have made with other guests!!) And that means we don't accept high maintenance whiners ("are we there yet? I hate delayed flights"), inexperienced travelers (stuff happens--you gotta roll with it), no overly-sensitive types (we like to have fun and kid each other mercilessly) but most of all people who ALL believe and practice in our adventure travel motto:
We are NOT HERE to save money, lose weight or be sober all day!
So here is the call-to-action: The official TRRA offer goes out to the whole subscriber list on Tuesday--first come first served--when the 50th member is in and paid, that's it. And I hear ya; $495 for 5 years?? What's the catch?
No catch. Think of it this way: with just 10,000 shares of AMZA, you are earning about $7200 a year! Just $5 grand of PFFA pays $500 in a year! Most subscribers who have been with us for more than two years have made $hundreds of thousands in profits and wealth. $495--really?
But You CAN jump the line and take advantage right this very minute to ensure you are not too late and miss all the fun and profits!. Just click here and sign-up https://transformityresearch.com/register
I personally invite you to join me and the TR Pro Team in earning even MORE stupid ridiculous profits riding the Industrial Revolution 4.0 wave--and have some great adventures, gastronomy, wine and laughs along the way!
Again, just click here and sign-up EARLY for Transformity Investing's All-Access Membership pass https://transformityresearch.com/register
Join the fun and the profits and save $500!