Happy Veterans Day! I’m writing today from the New Orleans 2013 investment conference. The agenda is packed full of sought-after speakers like Ron Paul, Rick Rule, Dennis Gartman, Charles Krauthammer, Peter Schiff, Mark Skousen and of course Weiss Research founder Dr. Martin Weiss.
Dr. Weiss gave an amazing presentation and warned the audience of the recent problems in the bond market. And I completely agree. More on that later this week.
If you’ve never been to a conference like this one, I highly suggest you try to go at least once. You can learn so much more in person — both from the speakers and other attendees.
In that same spirit, today I’ll let you learn from other readers. Our baby boomer cohort seems to be having mixed experiences in retirement.
First, we will look at some new wrinkles in mobile device technology, and then see what Carl Icahn is up to with Apple and another company in his crosshairs.
A few weeks ago I wondered if wearable devices would be the next stage in mobile technology evolution. I also mentioned that Apple CEO Tim Cook teased analysts by saying the company would enter new segments in which it is not presently involved.
Now the plot thickens with new developments.
- Last month Samsung launched the Galaxy Round, a curve-shaped phone presently available only in Korea. Reviewers report it fits users’ hands more comfortably, but it is not functionally different.
- LG Electronics recently revealed another curved phone they call the G Flex. Like the Samsung model, it will initially be available only in Korea.
- Then this weekend Bloomberg quoted an anonymous source saying Apple (AAPL) will launch two curved iPhone models next year.
- The same source said Apple is working on pressure-sensitive touch screen interfaces. The device could supposedly behave differently if you pressed on it harder or more softly.
Perhaps the most-intriguing development is that Samsung and LG are not launching the devices globally.
Maybe supply constraints limit the number of devices they can produce, maybe there is some kind of patent issue, or maybe the technology depends on characteristics unique to Korea’s mobile data networks.
We also don’t know if Apple is ahead, behind, or on a totally different track. The company could even have authorized the anonymous source in order to mislead competitors.
I’m trying to think of applications for a pressure sensitive touch screen. Current iPhones already have a proximity sensor that turns off the screen when you hold the phone to your ear. Combining a pressure sensor with curves must open up new possibilities.
Will the new iPhones sense pressure from Carl Icahn? I checked his Twitter feed today and he hasn’t said anything new about his Apple buyback proposal. Icahn has been busily applying pressure on other companies, though.
Today Icahn won a round with offshore drilling contractor Transocean (RIG). The company agreed to boost its dividend, make $800 million in cost savings, reduce its board membership from 14 to 11, and help shareholders elect a second Icahn-designated member to the smaller board.
Transocean owned the Deepwater Horizon rig where 11 workers died in a 2010 incident that also released a huge oil spill into the Gulf of Mexico. British Petroleum (BP) actually operated the rig, but Transocean still had to pay $1.4 billion in penalties.
As for Icahn’s proposal to Apple, he previously said he and Apple CEO Tim Cook plan to meet again. I’ll report back when anything happens.
If you own Apple shares, you may have noticed a little drop last week. The stock went "ex-dividend" on Nov. 6. That means anyone who bought on Nov. 6 or later will not receive the latest $3.05 quarterly dividend.
When a stock goes ex-div, the share price adjusts downward to account for the difference. The cash payment typically lands in your brokerage account a few days or weeks later.
Dividends can throw off the calculations if you are tracking a stock’s performance over time. In the model trade I suggested, we tracked a $495.74 entry price on Aug. 15. Today AAPL closed at $519.05. That means you have a $23.31-per-share unrealized gain + a $3.05 dividend.
For simplicity, many investors account for the dividend by adjusting their buy price downward. In this case, you would give yourself an "adjusted price" of $492.69 ($495.74 – $3.05).
Looking at it that way, the open gain is $26.36 per share, or 5.4%. Apple pulled back since the last quarterly earnings report, but the stock still trades below fair value according to our research. I would hold on for bigger gains ahead. Maintain your $404.44 trailing stop.
Our other open trade is eBay (EBAY). I gave you the recommendation in my Oct. 17 issue at $51.38. EBay has not paid a dividend. The shares closed at $52.82 today, giving you a 2.8% unrealized gain.
Like Apple, I still think eBay is a good buy at today’s price. I do not recommend selling, but you can move your trailing stop up to $40.39. That’s 25% below the Nov. 7 intraday peak of $53.85.
Last week I invited readers from the Baby Boom generation to share their stories about retirement. The latest employment data made me wonder how many of you are still working after reaching age 65.
Here are some of the responses I received.
Reader Erhard G. says: "The combination of Social Security and fixed pension were not enough to live comfortably, so I accepted an invitation to rejoin my profession of building inspector on a contract basis. The offer was good enough to enable pay off our two cars, and to enable significant savings."
Reader James W. says: "I’m a still-working boomer, part-timer. I can’t live on SSI."
Reader Robert B. says: "I am a 66-year-old physician who has been working the past two years in a ‘pre-retirement’ full-time job with the U.S. Navy. I plan to work another three years until I am 1) eligible for federal retirement, 2) almost 70, and 3) due to take my re-certification family practice board exam.
"If I feel like retiring sooner, I probably can, but the extra income — which is less than I was making in my previous practice — is nice to build up savings."
Reader William H. says: "I am a 65-year-old boomer born in 1948 and still work seasonally by choice. I’m Santa Claus!"
Reader Paul G. says: "Hi, I am a still-trading/-investing retiree in Australia who loves trading and making money through yours and others’ guidance!"
Brad: I’ve posted a few more letters online. They show a wide range of experience and outlook. We have readers who are comfortably retired, others who are struggling and doubt they will ever retire, and yet others in between.
We also see how people who prepared well can still suffer from events beyond their control. Several people remarked how hard it is to live on Social Security plus a part-time job. I suspect more people are in that situation than we think.
Whatever your own status, I hope Uncommon Wisdom Daily helps you stay informed and make better investment decisions. Thanks to everyone who shared these stories. My mailbox is always open, so please chime in.
I can’t end without thanking all the veterans reading this letter. I appreciate your service and I know the rest of our nation does as well. I hope you enjoyed your day.
My own father is a Vietnam veteran. He has told my brothers and me many stories of the unique brotherhood of those who saw war up close, and the character of those who stood ready behind them.
Every generation that follows should remember the war veterans’ honorable sacrifices — and hope to do what we can to make sure those efforts were not in vain.
With bond markets and banks closed for the holiday, stock trading was slow today. Here is a little bit of news…
- Low trading volume couldn’t keep the Dow Jones Industrial Average from marking a new record high. The Dow closed at 15,782.91.
- Earnings season isn’t over yet. This week we will hear from top retailers Wal-Mart (WMT), Nordstrom (JWN) and Macy’s (M). Their quarterly results should give us clues about consumer sentiment.
- Other retail reports are coming. Best Buy (BBY) and Home Depot (HD) will both post earnings on Nov. 19.
Good luck and happy investing,
Uncommon Wisdom Daily
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