Is Today's Society Addicted to Technology?

Please click on the web link below to read the article and watch my video

International Business Times Article link (including link to 4-minute Video) 

Is today's society addicted to technology? The benefits of the tech we use on a daily basis are plain to see. But with the pervasive influence of social media applications like Facebook, Instagram and Twitter in everyday life, are we becoming slaves to the technology rather than it being just a productivity-enhancing tool for us to exploit?

People are increasingly developing unhealthy relationships with technology, particularly the mobile technology contained in our smartphones and tablet computers, to the extent that you can now seek professional psychological help for technology addiction, much as with other established addictions such as drugs or alcohol.

The Internet of Things in an Always-Connected World

The fact is that the internet is becoming increasingly easy to access, given the advent of wi-fi hotspots throughout cities and the advent of 3G and now 4G mobile phone networks designed to carry ever-larger amounts of data to and from our various mobile computing devices.

Whether you like it or not, and I personally have my reservations, mobile technology is becoming ever more pervasive, with the introduction of wearable technology such as the iWatch, technology-enabled clothing and even now shoes.

This technology growth can be clearly seen in the demand for semiconductor chips, the building blocks of all technology from PCs to mobile phones to sensor-based embedded technology found in domestic appliances, cars and in all manner of industrial automation (Figure 1), with growth in semiconductor demand from the "Internet of Things" forecast by Gartner to grow 36% in 2015.

1: The Internet of Things Semiconductor Revenues by Electronic Equipment

Healthcare Monitoring is a Huge Advantage on the Way

A new source of growth in the Internet of Things relates to health and exercise monitors, which can not only record your pulse, distance walked/run, time slept and calories burnt, but can now push users to adopt "healthy habits" by exercising more regularly throughout the day.

On the basis that in healthcare, prevention is better than cure, this wearable tech area is clearly set to grow quickly in the near future, suggesting that demand for sensors is set to explode. Already there are a wide variety of wearable watches and gadgets that serve to encourage you in a healthier lifestyle, as detailed in this CNET article.

US Technology Has Performed Very Well of Late

This strong growth in revenues as business investment in technology ramps up and as consumers continue to buy into handheld and wearable tech in ever-greater numbers has been reflected in the strong performance of US technology stocks since the beginning of last year (Figure 2) - the technology-heavy Nasdaq 100 index has gained 50% in sterling terms versus less than 10% for the FTSE 100.

2: US Technology Has Vastly Outstripped the FTSE 100

Source: Bloomberg

This outperformance looks very impressive, but needs to be set in the context of the last 14 years, where the Nasdaq index is still struggling to recapture its year 2000 highs, lagging the FTSE 100 over this longer timespan (Figure 3):

3: But the Nasdaq Still Lags from 2000

Source: Bloomberg

Best Ways to Invest in Technology

With spending on technology of one sort or another taking up an ever-larger slice of the economic spending pie, I see tech stocks maintaining this outperformance trend going forwards.

I prefer to invest in this theme using Technology-focused exchange-traded funds, such as the two I have listed below. As a side-benefit of investing in one of these exchange-traded funds, a UK or Europe-based investor also has the currency benefits of being invested in US dollars, at a time when the US dollar continues to strengthen against all European currencies thanks to its stronger underlying economy.

• The Source Technology S&P US Select Sector ETF (code: XLKQ). This London Stock Exchange-listed fund invests in US Technology heavyweights such as Apple, Microsoft and Google and is quoted in pounds sterling.
• The Powershares EQQQ Nasdaq-100 ETF (code: EQQQ). This London Stock Exchange-listed fund invests the constituents of the technology-heavy Nasdaq 100 index, which is comprised of 60% Technology stocks, 15% Biotech & Healthcare stocks, and 25% other sectors. The largest holdings are also Apple, Microsoft and Google, and again is quoted in pounds sterling.

All the best,
Edmund

Alibaba.com to list at a mammoth $150-200bn? How to profit

The Chinese business-to-business (B2B) and business-to-consumer (B2C) e-commerce platform Alibaba has finally filed for a US flotation (Initial Public Offering) today, due to list in the near future in New York. Current analyst estimates pitch the starting market value of the entire company at between $150bn and $200bn, a massive public company by any standards and likely to represent the largest technology IPO since Facebook came to market back in 2012.

The business, headed by former English schoolteacher Jack Ma (no wonder that he speaks English so well!), dominates business to business e-commerce transactions, typically between suppliers and customers not only in China, but effectively globally.

While a detailed description of all Alibaba’s businesses is beyond the scope of this (short) article, there is more detail to be found here on cnbc.com, for those who are interested in finding out more about the company.

Alibaba by the numbers

Just a few numbers to illustrate its 400lb gorilla-like presence in this technology transaction space:

• Over 1.5 trillion yuan, or $248bn in value of transactions executed over the last year through its 3 main marketplaces;
• 11.3 billion orders placed annually;
• 231 million annual active buyers;
• 8 million active sellers;
• 5 billion packages generated on their Chinese retail marketplace last year;
• $5.66bn of listed revenue for the 9 months to 2013 year-end;
• Net income (profit after tax) of $2.85bn for the same period.

This puts Alibaba ahead of Amazon plus Ebay together in terms of numbers of buyers and volume of transactions, according to Reuters! (Bear in mind that Amazon has a total market capitalisation in the US of $135bn, while Ebay is worth over $64bn currently).

Where could it be in the list of biggest listed companies?

At the upper estimate of a starting market value of $200bn, Alibaba would be the 14th-largest company listed in the US, between the bank JPMorgan and the telecoms company Verizon. In the Technology sector, only  Apple (market value of $512bn), Google ($350bn) and Microsoft ($323bn) would be larger. Note: at $200bn, it would have a larger value than the technology grand-daddy IBM ($192bn market value)!

Even at the lower estimate of $150bn, Alibaba would sit at number 23 in the list of largest listed US companies with the same market value as Facebook now, over 7 times more than Twitter and 9 times more than Linkedin.

How to get exposure in Alibaba?

Please click on the link below to see how you can get exposure to Alibaba...

Alibaba-com-to-list-at-a-mammoth-150-200bn-how-to-profit

 

 

The Idle Investor: Today's Bloomberg TV interview re Emerging Markets, Technology allure

Top of the morning to you!

Since I had to get up super-early to go to do this TV interview live at Bloomberg at 7am this morning, I thought I would take this opportunity to inflict the interview on you as well...
  
              Bloomberg TV: Putting-the-emerging-market-slide-in-perspective

The topics of this 5-minute interview were the value that can be found today in Emerging markets and European stock markets, following the current correction. 

Personally speaking, I am even starting to be interested by Russian stocks, given the very low valuations (often 3-4x P/E and 5-6% dividend yields!) on offer now from Russian giants like Gazprom and Lukoil, at massive discounts to Western oil & gas producers. 

As always, I am very interested in any feedback you may have, so don't hesitate, fire away!

Edmund

The case for the US technology hardware sector

Tech has only marched halfway up

While technology stocks have enjoyed a strong rally since the stock market nadir at end-2008, it is perhaps surprising to note that they have only recovered 50% of the ground lost during the 2000-2003 tech bust.

But over the last decade or so, there have been many changes in tech-land. Many mobile phone makers such as Nokia, Motorola, SonyEricsson and Blackberry have come and largely gone, to be replaced by Apple, Samsung, LG and a whole raft of Chinese Android smartphone producers. We have seen the advent of the tablet and even the “phablet” (a crossover between a smartphone and a small tablet), and of course we have witnessed the phenomenal rise of social media, with Facebook, Twitter, and Linkedin leading the vanguard. I want to focus in this article on the technology hardware sector, makers of physical technology objects rather than providers of services or software.

Improving Capital Spending Trends Are a Help

The technology sector is particularly geared to macro investment trends, as companies tend to favour technology-related investments in good economic times as they tend to bear quick-to-emerge and sizeable fruit in the form of productivity, boosting profitability. Guess what? US durable goods orders have recovered steadily over last year, pointing to improving corporate investment trends that should benefit tech stocks.

To read the rest of this article, please click on the MindfulMoney link below:

Tech-has-only-marched-halfway-up

Bon weekend,

Edmund