Jun 052014
 

Want to invest in China? The Shanghai stock market index (SSE) has returned an embarrassing -22% in the last 5 years. A buy and hold strategy would have lost money. Doh! The Chinese stock market is too mainstream anyway. So I’ve developed a better strategy to invest in the world’s second largest economy. My plan is a bit risky, and you’ve probably never heard of it before, but so far it’s proving to be very effective. If anyone else had held the same investments as me, their net worth would have also increased by more than $100,000 over the last 12 months 😀 See my fiscal updates category for details.

To successfully invest in China we have to think like hipsters, and buy stuff before it becomes cool 😉 So here is my strategy. Invest directly in China’s economy by purchasing financial assets OUTSIDE of China that the wealthy Chinese are also buying. Let’s study what the rich in China are investing in so we can predict with relative certainty how the next cohort of new Chinese millionaires will use their money as well. Then we just need to invest before they do.

So what are Chinese millionaires buying?

Generally speaking Chinese investors love real estate. An investment bank recently reported that the richest 1% in China owns about one third of all residential properties in the country. Holy hamburgers! Such property hogs 😯 They are so enamored with housing that it’s no surprise Chinese investors are looking elsewhere in the world to satisfy their real estate addiction 😕 The top three countries that are attracting Chinese investors are the U.S., Australia, and Canada.

14-06-chinese-realestate-foreign-countries Chinese foreign investors invest in china

Real estate agents do not have to disclose their client’s information to any global anti-money laundering organization. So foreign Chinese buyers can land with suitcases full of cash and get real estate deals done clean and fast.

China’s outbound real estate investment jumped by 25% in the first quarter of this year. Great Scott! The top cities to attract Chinese money so far in 2014 have been Chicago ($464 million), London ($348 million), Sydney ($243 million), Melbourne ($150 million), Los Angeles ($144 million) and San Francisco ($72 million), according to real estate firm Jones Lang LaSalle. Chinese buyers spent $30 Billion on overseas real estate in 2012. About $9 Billion of that went to the U.S. and a lot of that was in California.
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May 302014
 
Apple and Beats

The world’s largest company, Apple Inc, has purchased Beats Electronics for $3 billion. Beats by Dre is a popular brand of headphones that sells for $300 a pair. #veryprofitable. As an Apple shareholder I approve of this deal and hope to make lots of money from this strategic move 🙂 I hope consumers are ready to buy the most overpriced piece of commodity gadget made in China ever!

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April Inflation

The cost of living increased 2%, which is the highest it’s been in recent history. Gasoline, natural gas, shelter, and food have all become more expensive. This is great news for investors! I own many shares of Suncor and Encana, which are oil and gas companies. They are both listed in my Hedge Fund page for disclosure. The price of gasoline at the pumps is up 6.6% since April of last year, but my Suncor stock is up 30%! Encana’s share price is up 25%! Real estate prices are also up.

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Inflation is good for those who own the right assets. So we have to invest in order to profit from this trend. Don’t wait for a good time to buy investments. Just buy them first, then wait for your investments to go up 😉

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Mar 062014
 

According to brand consulting company Interbrand, Apple has overtaken Coke as the world’s number 1 brand last year 😀 Second place goes to Google! For more than a decade Coke has always been on top. No matter where you go in the world people will recognize the smooth taste of Coca Cola, but this time it has fallen to 3rd place.

The research estimates the value of Apple’s brand to be about $100 billion, which is a 28% increase from the previous year. That means the brand itself is worth roughly $110 per share. I invested in Apple stocks not long ago because I believe in the brand. Even though I don’t own any Apple products I trust their marketing and product line to deliver great returns to shareholders 🙂

Few brands have enabled so many people to do so much so easily, which is why Apple has legions of adoring fans,
~Interbrand

apple-logo-red best brands

Below is a look at the top 10 brands in the report.

Top 10 global brands

Apple*
Google*
Coca-Cola
IBM
Microsoft
GE
McDonald’s*
Samsung
Intel*
Toyota

* = Companies I currently own

I think a smart way to invest is to put your money in companies that have strong brands. In fact, branding is one of the economic moats that will often keep a company profitable during recessions because people would want to buy goods and services from names they trust 😀

Looks like I have 4 out of 10 on that list so far. I will add Coke and IBM to my list of stocks to buy and maybe one day collect all 10 of the best brands in the world 😀

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Random Useless Fact: It’s an urban myth that gum takes 7 years to pass through the digestive system. It usually only takes one or two days.
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Dec 262013
 

Earlier this year I explained how to profit from the growing world of smartphone and tablet devices by using the mobile trinity strategy 😀 I didn’t have enough money at the time to complete the trinity and only had 2 out of 3 parts. Well I finally saved enough and earlier this week I bought 30 shares of Qualcomm Inc.

Qualcomm designs and manufactures chipsets and other technologies that go into mobile gadgets. With a market capitalization of ~$125 billion, it’s worth more than ARM, NVIDIA, and AMD combined. Qualcomm is about the size of Intel Corporation, which I also own shares in 🙂 The reason QCOM is so successful is because its technology is pretty much ubiquitous in all our cell phones. Its entire business is getting the licensing fees (like royalties) on pretty much every smart phone we use.

“We believe Qualcomm will pick up significant smartphone share on multiple platforms into 2Q/June. There have been numerous reports that Qualcomm could supply up to 70 percent of the Galaxy S4s, supplying to both US and European S4 models versus only US on the prior S3 platform.” ~Rakesh in a statement to ZDNet in April 2013

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Last week Apple announced that it has just partnered with China Mobile to bring the iPhone to the carrier’s 4G and 3G networks starting in January 17, 2014. This is a huge deal 🙂 T-Mobile, Verizon, and AT&T only have about 100 million to 130 million total subscribers each. But China Mobile, the largest mobile network operator in the world, has about 750 million subscribers! So even a small percentage of that market could be very lucrative for Apple 🙂

snap_dragon_chip

Although iPhones use one of Apple’s own chipsets, they still use Qualcomm’s RF transceiver, baseband processor, and power management chips. So this new agreement Apple made is good for QCOM shareholders too 🙂 There is also speculation that Apple may use more of QCOM’s technology in future generations of their more affordable devices like the iPhone 5c, which is meant to target the medium price range of the smart phone market. This is because QCOM’s chips have the ability to integrate Bluetooth and Wi-Fi directly into the main chip which would save Apple money.

“Smart phone growth is projected to be 16% annually through the end of the decade. (Qualcomm’s) LTE chip has about 97% market share, so they are in good shape. Have gone from being the 8th or 9th chipset producer a few years ago and are now number 3. It tends not to get the credit that it should. Trading at about 15X next years earnings. Its growth is not only fairly robust, but is quite predictable.”  ~Gordon Reid , GoodReid Investment Counsel

QCOM allows us to invest in the growing cell phone market (mostly driven by Asia) without actually having to pick a leader 😀 Pretty good deal I think 😉 Now that my trinity is complete, I can just sit back and enjoy my profits as all 3 companies have incredible cash flow. How do you plan to take advantage of the fast growing mobile market in the future?

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I also bought 40 Comcast shares on the same day I bought QCOM. Both were purchased in my RRSP using TD Web Broker. If you live in the U.S. Motif is a great platform for trading stocks.  Comcast Corporation (CMCSK/CMCSA) is the largest mass media and communications company in the world by revenue. It owns NBC, Universal Studios Inc, and also provides cable and internet to tens of millions of Americans. It’s Comcastic 😆 Investing is so much fun because you get to learn how all sorts of businesses operate 🙂

Oct 202013
 

Last Friday Google Inc surprised the world with its latest financial numbers and their shares jumped by more than 13%, Heyo!(⌒▽⌒)The company’s market capitalization grew by about $40,000,000,000 in a single day 😀 Each share of Google is now over $1,000 for the first time ever. I believe Google is a terrific long term investment. Sure, it doesn’t pay a dividend, but it’s proved to be a great growth stock! Its shares doubled in value in the last 5 years eh 🙂 And most importantly Google provides a real service that people use, sometimes on a daily basis, in markets that are expanding 😉 (search, advertising, mobile devices, etc)

prehistoric-googling-library

13-10-googleserversGoogle has now surpassed Microsoft and Berkshire Hathaway in terms of company value. It is now the 3rd largest company in the U.S., behind only 2 other giants, Apple Inc and Exxon Mobil.  I’m glad I bought some Google shares earlier this year for $705 each.

As most of you know I like to share my investment strategies. So last month I blogged aboot why it’s important to own both Apple and Google shares because they are part of a very profitable mobile trinity 🙂 If any of you fabulous readers out there read that post and decided to take action right away then you would currently have a 9% gain in your Apple shares today, and 13% gain from Google. So you’re welcome 😀

But for those who didn’t have a chance to invest in the mobile and advertising space yet it’s not too late 🙂 Analysts continue to be optimistic about Google. At least a dozen brokerages raised their price targets on GOOG. The average target is now $1,068, and the median is at $1,100, from 38 different brokers.

The success of Android, which becomes more and more popular every day, is starting to really add up, and Google is collecting small tolls along the way. Google’s ownership of the Android ecosystem makes Google like the house, in Vegas terms. ~Stifel analyst Jordan Rohan

Also like I’ve mentioned in the past Qualcomm is another good stock to buy in the same industry, which I don’t yet own. But I’m planning to buy some in November to diversify. I believe smartphones and tablets are still going to see growing sales across the world.

Google’s brand is ubiquitous, and everyone who uses the internet including bloggers use Google’s services (with geographical exceptions.) Can you imagine a world without the Google search engine, Gmail, or Google maps?

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If the digital mobile world is becoming an ever increasing part of our lives, why not make it a part of our investments too? 😉 Let’s all profit from the inevitable growth of technology 🙂

Disclosure: I have 3 shares each of AAPL, and GOOG in my U.S. margin account

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Random Useless Fact: The plastic things on the end of shoelaces are called aglets.