Investing

The Big Myth

The Big MythThe thinking behind this strategy initially appears very sound. The cost of whole life insurance is more expensive than term in the early years of a policy. Therefore, you should buy the same coverage for much less premium using a term policy and invest the amount saved between the two premiums into mutual funds. This difference, over time, will create more wealth for you and your family, while at the same time giving you plenty of coverage should you die prematurely. When you get older and the term policy gets far more expensive due to your advancing age, drop all coverage because you will have accumulated enough wealth for your retirement and leave money behind for your estate.

When I was 22 and wet behind the ears I thought the above paragraph was gospel and preached it to anyone who would listen. As with most great myths, there is always some truth and this is no different. The costs of whole life premiums are more expensive in the early years for the same amount of death benefit when compared to term rates for the same coverage.

Now here is the other side of the coin on the rest of the myth. Nobody (or very close) actually invests the difference in their premiums into an investment vehicle. So if their whole life annual premium is $3,600 and their annual term coverage is $600.00 the theory is they are saving $3,000 annually or $250.00 per month. If they put that amount every month inside a mutual fund then in 30 years they will have loads of money. The biggest hurdle is putting away that $250.00. If you are still a “buy term and invest the difference” kind of person, have you done what is described above? If you have, congratulations you are part of the ½%. Almost nobody is actually implementing this strategy but plenty are talking about the theory.

Financial success is not about theory but about actual results. If almost nobody is using the strategy, than it’s great for sound bites, but lousy for results. Let’s also examine the need for life insurance toward the end of your life. You need to look no further than the ads on television to see the huge market for life insurance at the end of your life. Big companies with celebrity spokespeople have been on the air every day for over a decade paying for advertising selling small, end of life, burial insurance. The advertising budget alone is staggering which asks the question, “How many policies do they have to be selling to pay for that advertising, their other expenses, and make their profits”? The non-scientific answer is a whole bunch! However, according to CSG actuarial in 2013 over $400,000,000 worth of these policies were sold spread out over 613,000 people just in that calendar year!

What does the information tell you about this nation’s financial model? Why would you buy one of those expensive policies in your later years? (Yes, they are expensive in relation to the amount of coverage you receive for your premium) The only reason is because you are not sure if you have enough liquid money saved to bury you and cover your final expenses! This is a great barometer of how, “buy term and invest the difference” has done servicing the American public.

In my own life, my mother passed away in 2010 just after the huge economic collapse of the previous couple years and before any real rebound in any of the financial or real estate markets. My mom had done well for herself and worked hard starting at the age of 17 years old. She certainly had acquired enough to cover her final expenses and leave behind a nest egg for her three children. However, she happened to die at a very inopportune time in financial history. Her home had decreased in value by 35% as did most of her investments (my Mom was very independent and did not ask for my help until the damage was done). I found out she had most of her money inside market vehicles that had gotten pounded during the previous few years.

So when she passed away she left considerable less of an estate behind than she believed she was going to just a few years earlier. She was not unique in her circumstances because that same scenario happened to many millions of Americans who passed away during those years. I am very grateful for the money she did leave for me and my family and we are fortunate that we did not “need” her money to survive. However, she really had no business being in mutual funds or stocks at that point in her life.

Had she been shown how a properly designed permanent life insurance program worked she could have long since stopped making any premium payments, had much tax free cash for her retirement years, and left behind hundreds of thousands of dollar more in her estate with a guaranteed death benefit. Many times it’s not what you don’t know that hurts you the most, but rather what you think you know that is false that’s the real killer.

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Stock Markets Are Down

Stock Markets Are DownAs of 1047 A.M., EST, the DOW seems confused currently reading down -38 points to 17991.82. The S&P is also pointing lower by 1.78 points at 2097.90. The NASDAQ is actually mildly higher up 13.82 points to 4920.18. As of yesterday’s session, here were the following closing levels: DOW – 18029.85; S&P – 2099.68; and NASDAQ – 4906.36.

A look at the foreign markets indicates the Nikkei 225 index consistently rose gaining +65 points to end the session at 18264.79. The Hang Seng also tacked on +47 points to finish the session @ 24832.08. The FTSE 100 index is down -10.86 points reading 6887.22. The CAC 40 is up 26.32 points to 4825.35. The German DAX is up +20.46 points coming in at 10981.46.

Oil continuing its plummet down 2.37/barrel to 49.77. Mmmmmm. 40’s again. Hungry investors?? Crude continues to slide as investors and analysts lower their hopes for the black gold. Oil stock prices continue to remain attractive for investors.

The precious metals are basking in the glory of green so far with Gold up 8.90/oz to 1211.90 and Silver up .16/oz to 16.51. Platinum is up .80/oz to 1169.00 and Palladium is also up 3.50/oz to 781.00. The safety of the precious metals always gives investor that needed security. With all of the news to be released today, some investors feel the metals are the way to go.

The markets will digest a host of information from various sources today regarding stats. Today, we’ll see jobless claims, the consumer comfort index, the Philly Fed Survey, Leading Indicators, the nat. gas report and petroleum status report, along with the Fed. Balance Sheet and Money Supply @ 4:30PM EST.

Keep an eye on markets as there is expected to be activity. Also SMM is watching plenty of HOT Penny Stocks! The Marijuana Sector continues to heat up and Cannabis and Hemp Stocks begin making their moves. Stocks like THCZ, GRCU, ERBB, HEMP, CBIS, MJNA, PHOT, and VRCID remain on our watch list.

Other Penny Stocks with big movement have been ENIP, RSHCQ, SUTI, RCHA, and ECIG. Watch for these stocks to make big movement to come. We’ll keep you posted as the morning evolves!!

Be sure to check us out at www.StockMarketMonitors.com

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Mobile Gaming

Mobile GamingIn the technologically advanced world we live in today, people have access to limitless amounts of information. The barriers to entry into an industry are decreasing before our eyes. Youtube stars are popping up around the globe, unheard of companies are receiving million dollar valuations, and individuals are starting their own ventures instead of adding value to existing enterprises. These are all great benefits of the internet age for entrepreneurs; however, one negative aspect of this culture is being seen in the mobile gaming sphere. With access to all this information, consumers’ attention spans are getting shorter, meaning that these mobile games have a shorter life span, and the companies in this industry need to create more value for consumers while also maximizing the profits over a shorter period of time. However, I don’t see this currently happening; companies like Zynga, Glu Mobile, and King.com are still following the same model as companies like EA or Blizzard, which is why there has been such volatility within this industry.

Zynga is a perfect example for this case. When they set their IPO price at $10 a share, it seemed like a good value due to their success with games like Farmville and Mafia Wars on Facebook. What Zynga management and investors did not account for was the short lifespan of these games. Zynga had been valued based on the success of these games, yet, when the novelty wore off, consumers stopped playing these games as quickly as they started and moved on to something else. As a company with over $2 Billion, one would expect them to learn from these early faults. However, they continued down this path, following the wants of consumers, but always one step behind. In an attempt to keep up with the attention spans of consumers, Zynga made a number of large purchases of companies with newest popular games, such as OMGPop’s Draw Something or Bonfire Studios’ Words With Friends. However, by the time these purchases went through, the growth in popularity of these games was already waning. Zynga would never see a return on their investment from these purchases. Zynga isn’t the only company who is making these same mistakes.

Glu Mobile has had some successful games since they started in 2001, but has seen volatility since their IPO similar to Zynga. However, they have never gained the attraction or popularity that Zynga once had, until they released Kim Kardashian: Hollywood in October 2014. With the popularity of the reality star, this game quickly hit the top of the app store charts and sent Glu’s stock to a 52 week high of nearly $7.60 per share. Users loved this new genre of game and it eventually lead to Glu Mobile’s most profitable year to date. However, less than a year later, the popularity of this game is decreasing and not holding the spotlight any longer and Glu’s stock priced fell dramatically to lows in the $3.40 range. Yet, Glu has not learned from this lesson and recently signed a 5 year agreement with Katy Perry to recreate the game with this year’s star. While I agree that Glu can still capitalize on the genre they have created, I will be interested to see if this is truly a new, innovative game or if it is Kim Kardashian Hollywood with a Katy Perry spin. The big question comes to: will users have the same level of interest in a similar game or has the novelty worn off? In my opinion, the novelty has worn off. There will be Katy Perry fans who will play the game, but I don’t think it will attract the spotlight that the Kim Kardashian version held. This is not to mention the 5 year agreement between Glu and Katy Perry, for a game that will only peak for a few months, even if it does follow the success of Kim Kardashian: Hollywood.

King.com is one of the latest mobile gaming companies to complete their IPO. Due to the popularity of their Kandy Krush and similar games with different “skins”, their IPO was priced significantly higher than Zynga’s or Glu Mobile’s. Despite the IPO price differences, these stocks followed the exact same pattern following their IPO. Down on the first day, followed by a bullish surge, and then a huge sell off causing the stock price to drop nearly 50%. I believe that this is all caused by the same problem, these companies are being valued based on their current success, yet people seem to forget that the focus should be more on the pipeline of games coming through, not the current popular game. By the time the market reacts to these games’ success, users are already starting to lose interest in the game. While Kandy Krush has provided King.com with some early success, they have yet to prove they can provide other successful games outside of this model.

Part of the issue is that these companies are being compared to long-standing successful companies like EA and Blizzard, who tend to focus more on the hardcore gamer demographic. These console and PC games tend to focus more on skill-based interaction and users are rewarded for their long-term loyalty to a game or franchise. Games like World of Warcraft have been largely successful due to the release of compatible expansions that allow users to carry over their skills, stats, and characters between games and utilize their skills in an ever-expanding world. Mobile games, in their current state, should not follow this same business model because they tend to focus more on point and click, micro transactions, and less skill-based interaction. Users are not rewarded for long-term use like they are in online console or PC games, so they have little motivation to keep playing the game on a long-term basis. Mobile game companies need to act on this gaming culture to stay ahead of the curve and continue to see long-term success, otherwise we will be seeing an industry of one hit wonders.

 

This article may contain forward looking statements and was written based on my opinion.

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Crazy Wall Street Investor

Crazy Wall Street InvestorI started my morning out the way I normally do today; I grabbed some water and headed over to my favorite investing outlet to see what the news was today. It looks like everyone seems to be talking about tech stocks. The truth is, the NASDAQ is nearing the 5,000 mark and investors are excited. However, I think that this steep increase may be danger in the making. The fact of the matter is that with economic conditions getting better, investors are more willing to make irrational decisions with regard to risk; and in my opinion that’s exactly what they’re doing. Ultimately, investors are creating a tech bubble. Today, we’ll talk about the history of investor willingness to take risk during positive economic times, a couple of tech stocks that are growing (and really shouldn’t be), and we’ll talk about why this may be another step toward the next economic recession.

Overall, Investors Have A Bad Relationship With Risk

When I think of the relationship between risk and investors, I think of that couple that always seems to be splitting up and getting back together. When there is a reason for it, the two seem like they were made for each other. However, when times get rough, they split up and go their separate ways.

The bottom line is that in poor economic conditions, investors tend to make smarter investment decisions; rather than take added risk for potential profits. As the United States economy continues to improve however, we’re starting to see what I would consider to be excessive risk taking in the market.

One thing that I’d like to remind everyone of is the fact that excessive risk taking was probably the leading factor in the economic recession the world is still recovering from. In that case, it was risk taking in the housing market. Nonetheless, while the market may have changed, excessive risk taking is still incredibly dangerous.

Why Am I Saying Growth Is Excessive? Look At These Stocks

Amazon (AMZN) – If there was a dirt rating for stocks, I would save that rating for the likes of Amazon. We’re talking about a company that has no real view, no plan, and until the 4th quarter of 2014, no profits. If I took the name Amazon and the ticker away, but gave the facts to expert investors; they’d probably laugh me out of the building! However, for some reason the company’s stock continues to climb. In the past month alone, the stock has climbed nearly $100. When I first saw the chart, I had to check another source. What are investors thinking? There’s no economy good enough to turn a horrible company into a great enterprise; stop throwing your money at the wall!

Google (GOOG) – I love Google in the long run, but in the short term, the price is growing at a very unsustainable rate. Look at Google’s last earnings report. Guess what you’ll see! You’re going to see a big miss! However, if you search online, you’ll see statements like “Google’s Miss Wasn’t All That Bad!” Come on guys, you’re investors, you know that a miss is a miss! If you paid attention to the report, you also know that Google is struggling with foreign sales as a result of the strong US Dollar. So why; an anyone just tell me why, Google’s stock is up $40 in the last 30 days? It just doesn’t make sense! I can understand meager growth on faith alone, but 10% in 30 days says investors are getting crazy with risk!

Excessive Risk Taking Needs To Stop!

The bottom line is that being comfortable with risk is one thing, but being enamored by the reward and blinded to risk is another. I’ve talked to tons of investors and I have to say, they’re some of the smartest people I’ve ever met. So, I can’t for the life of me understand why so many would make the mistake of overvaluing a poor company like Amazon and pumping too much money into Google. If this keeps going, there’s no where left to go but bubble land; and you all know that bubbles pop!

What Are Your Thoughts?

Do you think we’re looking a tech bubble in the eye? Why or why not? Let me know in the comments below.

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S&P Hits Record High

S&P Hits Record HighChecking in Wednesday, February 18, 2015 at about 10:29 A.M., EST, markets are somewhat sluggish off their ever impressive highs that we’ve been clocking. Most recently, the S&P closed at 2,100.34 but not before tagging an intra-day All-Time high for the index of 2,101.30. Today, the S&P is giving back some -6.28 points to about 2,094.06. The DOW is also down but near its all time highs as well. The DOW levels in today at 17,996.75 down -50.83 points. The DOW appears to be wrestling with the 18k level deciding whether traders will take it to the next level charging forward towards 20K like the Nikkei or whether we’ll back off taking some gains off the table. Meanwhile, the NASDAQ is also down -5.24 points coming in at 4,894.02.

Last night the Nikkei soared up +212.08 points to 18,199.17. The index appears to be eyeing up a strong move toward the 20K level analysts believe. The Hang Seng displayed modest gains up +47.20 points to 24,832.08. The FTSE 100 is down -20.92 points coming in at 6,877.21. The CAC 40 is up +35.76 points to 4,789.75. The German DAX is up +35.87 points to 10,931.49.

Oil is currently dropping .63 cents to $52.90/barrel. Many analysts believe this is a fabulous entry point to buy and hold oil if you have the ability. Personally, we cannot disagree.

Gold continues to flirt with $1,200/oz levels slipping down 2.80/oz to $1,208.60/oz. Silver is trying to move upward gaining three pennies an ounce today up to $16.49/oz. Platinum is down $5.60/oz to $1,172.40/oz. Palladium follows the downward trend to $780.60/oz down $3.60/oz today so far.

Some of the noteworthy Penny Stocks we’re keeping an eye on at CNA Finance and Stock Market Monitors www.StockMarketMonitors.com are THCZ which has recently made a tremendous selloff to the downside. We’re following to see if we’re making higher highs to continue this upward surge in this HEMP based stock. Also, GRCU has had much recent activity to the downside as well selling off major volume. Watch for this stock to make a nice kickback at some point.

As always over at Stock Market Monitors we’re keeping a watchful eye on the entire Marijuana based Penny Stock Sector along with other Hot Penny Stocks, Market Trends, Breaking stories, and other Juicy News. Follow us on Twitter at King Stock @MarketMonitors and FB at King Stock. Check out our blog and follow us at www.StockMarketMonitors.com.

 

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Apple Self Driving Car

Can you imagine it? A blind person sittingApple Self Driving Car in the driver’s seat and driving to his or her mom’s house? It sounds like a thing of the future doesn’t it? Believe it or not, that concept really isn’t all that far off. As a matter of fact, Google already produced a self driving car that was used to allow a blind man to drive! The video is below. However, there are a few kinks that need to be worked out of the technology before it becomes widely available. While several companies are already racing to develop the perfect self driving car first, a new contender has entered the race a bit late. Apple may be developing its own version of the self driving car! Today, we’ll discuss why experts think Apple’s joining the race, take a look at what the car may be capable of, and how the market reacted to the news; but before we get to all of that, check out this video!

Is Apple Really Developing A Self Driving Car?

The first thing I think we should touch on is the fact that Apple hasn’t released a statement announcing that they are indeed developing a car. However, there are a couple of signs that are leading experts to believe that the company has decided to join the race. Those signs include…

  • CarPlay – Experts argue that Apple has already shown interest in the automobile market with CarPlay. Knowing Apple, it’s only a matter of time before the company expands it’s presence in the market.
  • Apple’s Ability – Throughout the company’s history, Apple has shown that they have the ability to manufacture amazing products and innovate technology to make products do things that consumers never imagined. So, it’s not out of reach that they would be able to create their own “Smart Car”.

What Apple’s Self Driving Car Could Be Capable Of

If you know Apple, you know that they don’t just create technology. We’re talking about a company that’s known to amaze consumers with the new capabilities they’ve proven are capable in technology. So, what will the self driving car most likely be capable of? Here’s my personal opinion.

  • Driving Itself – OK, so this one’s obvious, we’ll move on to the next.
  • Features For The Blind – I’d imagine that the largest market that would be interested in the self driving car would be blind consumers. With that said, an Apple car would most likely include features to make life easier on the visually impaired. These features could include voice commands, a feature that states the time, maybe something that tells the driver where they are as they drive, and it will most likely be able to drive to the closest restaurant without an address. Overall, if Apple really is doing this, I would imagine that their car would take the need for a manual operator of the car completely out of the equation.

Do Investors Like The Idea Of A Self Driving Car?

Obviously there’s no way for me to ask each and every Apple investor if they like the idea of a self driving car, but it is possible to see what they think overall, just look at the market! Because the market was closed yesterday, the best thing to do would be to look at morning trading. In this case, Apple had substantial growth in morning trading; leading me to believe that investors like the idea of an Apple car. However, in mid-day trading, it seems as though the company’s stock is falling in price; leading me to believe that investors are starting to realize that Apple hasn’t confirmed their involvement in the creation of a self driving car. So, based on everything I’ve seen, I’ve come to the conclusion that investors like the idea, but aren’t convinced that it will come to fruition since there hasn’t yet been an announcement.

What Do You Think?

Do you think Apple really is creating a self driving car? If so, do you like the idea? Let me know in the comments below.

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Dow Is Down

Dow Is DownChecking in on the markets as of 11:07 A.M., EST, CNA Finance reports the DOW gave back -48 points coming in at 17971.13. The S&P marks 2092.15 down 4.94 points. NASDAQ is down 8.29 points at 4885.54. Markets seem somewhat lazy after the Presidential extended weekend.

Oil markets are up 1.57 at 52.78. Gold is down 20.90/oz coming in at 1209 testing the 1200 levels. Silver is down .95 cents at 16.44. Platinum is taking a hit down 32.10/oz at 1176.40/oz. Palladium is also down 10.70/oz to 784.80/oz.

The Asian markets were mixed last night with the Nikkei 225 down -18 points to 17987 and the Hang Seng gained +59 points overnight to 24784.88. The European markets fell mixed with the FTSE 100 up +22 points at 6879.58. The CAC 40 was down -7.75 points to 4744.20 and the DAX was down almost half a percent -43 points to 10880.22.

The Pot Sector was on fire in the premarket trading more shares than normal with CBIS in particular. Following the opening bell, THCZ took the spotlight when it struck .047 cents in today’s session so far. THCZ currently rests at .037 cents. ERBB, MJNA, HEMP, VRCID, and GRCU are other to keep on your Weed Watch.

Keep posted for market developments.

Check us out at www.StockMarketMonitors.com for our latest stories Pot and Penny Stock gossip and hot market stories. Follow us on Twitter King Stock @Market Monitors and Facebook at King Stock.

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Biotech Tuesday Talk

Biotech Tuesday TalkAchillion Pharmaceuticals (ACHN)

Shares of Achillion gained 7% on 2/9/15 last week when it had announced that it had achieved a 100% SVR12 in a phase 2 trial treating patients with the genotype 1 version of the Hepatitis C virus — HCV. The trial tested for the primary objective of patients being able to achieve a 100% SVR — Sustained Viral Response — in a 12 week period. All 12 patients enrolled in the study were able to achieve that 100% SVR in a 6-week period marking a fast reduction treatment for these patients with the genotype 1 HCV. The trial used a combination of 50mg of Achllion’s ACH-3102 together with 400 mg of Sovaldi produced by Gilead Sciences (GILD). One thing to note is that the study was a ribavirin free treatment regimen which is good because ribavirin is very toxic and has many adverse effects. Achillion achieving such a great response rate for these patients in a 6 week period is encouraging enough but now the company plans to attempt to leverage its other assets ACH-3102, ACH-3422, and sovaprevir to reduce treatment time down to 4 weeks. If it can pull that off then it has a chance to become a powerhouse in the Hepatitis C space if and when its drugs are ultimately approved.

Regulus Therapeutics (RGLS)

Shares of Regulus Therapeutics remained down 7% on 2/9/15 when it had announced final results from its phase 1 trial testing RG-101 as a single-shot injection treatment for patients with all genotypes of the Hepatitis C virus. The trial even tested patients who had relapsed from interferon — a bundle of proteins known as cytokines that help  trigger the immune system and stop viral replication. The problem with interferon is that it produces a lot of undue toxicity to the patient’s body. When higher doses of interferon are given to patients there is a possibility to get severe side effects similar to that of chemotherapeutic agents to eradicate cancerous cells. Such side effects include: Nausea, vomiting, hair loss, allergic reaction and many others.

There were two different types of doses being tested using the RG-101 single-shot injection for Hepatitis C. One group received 2 mg/kg and the other group received 4 mg/kg. The 2 mg/kg dose group achieved a BLOQ — Below the limit of quantification for Hep C virus —  with 2 patients out of the 14 patients treated at day 57. Although in the 4 mg/kg dose group their were 9 patients out of 14 patients that were BLOQ of HCV RNA levels. Both trials will be followed for 6 months to one year to determine further reductions of HCV RNA levels as time progresses. Regulus is doing this to determine the full extent of efficacy that RG-101 can achieve as a single shot cure for HCV. Whether or not Regulus achieves a single-shot cure will not make or break the company. That is because the company may also be able to combine its RG-101 treatment with other oral HCV treatments that may produce increased efficacy.

Pfizer Inc. (PFE)

Pfizer announced on Friday 2/13/15 that the FDA has accepted the company’s New Drug Application (NDA) for ALO-02 — a combination of oxycodone hydrochloride and naltrexone hydrochloride — that is used to treat non-cancerous types of pain. The main improvement of this formulation over other opioids currently marketed is that it was specifically built to be an abuse deterrent type of drug. Pfizer achieved this function by first making the capsules to be extended-release capsules. This means that the drug is released in the body over a long period of time and not immediately thus reducing the risk of the oxycodone pill being abused by the user. Secondly the pill is designed in a way where if the user takes the pill as prescribed orally then the oxycodone hydrochloride does its job properly like it is supposed to, but if the user attempts to crush the pill then the naltrexone hydrochloride counteracts the effects of the oxycodone hydrocloride .This mechanism of action blocks the ability to abuse AL-02 by attempting to crush it then inhale it or take it intravenously through the blood stream. Pfizer has already conducted two phase 3 trials to prove the efficacy of the compound and an additional three studies already tested the ability for AL-02 to be an abuse deterrent formulation — ADF.

Abbvie (ABBV)

Abbvie announced on Thursday 2/12/15 that it had submitted a New Drug Application in Japan for its all oral regimen that is free of both Ribavirin and Interferon — two previous standard of care drugs for Hepatitis C infection. The NDA was filed because Abvvie’s two-part combo drug regimen — paritaprevir/ritonavir with ombitasvir — achieved an SVR12 of 95% in Chronic Hepatitis C patients with genotype 1b. These patients were treatment-naive, meaning that no previous treatment had been given to them. In addition these patients were non-cirrhotic, meaning that they were not in an advanced liver disease state. The trial the company ran was known as the GIFT-1 study which recruited 116 patients. Abbvie already has a three-part combo drug regimen approved in the U.S. by the FDA for Chronic Hepatitis C infection and is marketed as Viekira Pak. This additional approval would put Abbvie in a great spot in terms of global reach for its Hepatitis C treatment regimen.

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Deutsche Post tests parcel uav

Deutsche Post tests parcel uavAs drones continue to become more and more popular, consumers and businesses alike have been waiting on the FAA (Federal Aviation Administration), hoping for drone rules and regulations. Well, the new rules and regulations have finally been drafted; and for the most part, drone enthusiasts are incredibly happy with the result. However, companies that plan to use drones commercially, like Amazon, aren’t happy at all. Today, we’ll talk about the new FAA rules, the hypothetical roadblock the regulations are to Amazon and companies like it, Amazon’s response to the new regulations, and what this could mean for Amazon as an investment. So, let’s get right to it.

The Drone Regulations That Have Amazon Squirming

According to the Federal Aviation Administration, companies can use drones for commercial purposes. However, they can’t use them in the way that Amazon plans to. That’s because the new rules state that commercial drones must be within line of sight of the operator at all times and that the drones cannot be flown over crowds of people. That’s exactly what Amazon’s Prime Air was intended to do.

The ultimate goal of Amazon’s Prime Air program was to create a delivery system where drone operators were inside the warehouse (not within an eye shot of the drone) and could fly packages anywhere within a certain radius (even over crowded parks and other areas).

This Is A Major Roadblock For Amazon

Amazon has pumped quite a bit of money into their drone program. As a matter of fact, in the beginning of the R&D phase, the company spent about as much on the program in a single quarter as it costs them to ship an entire year’s worth of packages. Given the fact that the program has been developing for quite a while at this point, if Amazon can’t get around the rules in one way or another, they’ve wasted a ton of money.

Amazon’s Response To The New Regulations

Amazon responded how one would imagine they would in this situation. They’ve spent billions of dollars on the Prime Air program and don’t want to see that money go down the drain. So, they’ve issued strong announcements essentially stating that they are committed to the program and will fight to ensure that their goals do come to fruition. In their response, Amazon made it clear that they believe faster deliver is a consumer need and that the FAA must make changes to address this need. Here’s what they had to say…

The FAA needs to begin and expeditiously complete the formal process to address the needs of our business, and ultimately our customers…We are committed to realizing our vision for Prime Air and are prepared to deploy where we have the regulatory support we need”

Knowing Amazon’ historic overspending habits, the message is clear. Jeff Bezos is screaming…”We will pump billions of dollars into this, even if our investors don’t like it because in the long run, our business and it’s customers need Prime Air (In my almighty opinion of course.)”.

Is Amazon A Good Investment

Recently, Amazon produced meager positive earnings that excited investors enough to send their stock value skyrocketing. However, I didn’t invest then and would not invest now. The reality is that even though they produced meager earnings, their stock is incredibly over valued. With such small margins, issues like what we’re seeing with the FAA could cost Amazon enough money to send them back into the negative for Q1 2015. With that being said, I wasn’t convinced on meager earnings, and I’m definitely not convinced that I should buy Amazon now!

What Are Your Thoughts

Would you invest in Amazon? Why or why not? Let me know in the comments below!

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Mid Market Check In

Mid Market Check InAs of 11:39 A.M., EST, the DOW Jones Industrial was at 18021.54 up +33 points. The DOW hit its 52-week high on December 26, 2014 coming in at 18,103.45. Since then, the DOW has taken a drop off kissing the low 17K levels. Many investors feel the economy is showing very mixed indications, leading to market confusion and potential overinflation. While others indicate we are in for a massive rally. With all the major indices at or near All-Time highs, time will tell what the markets will bring. The Nikkei 225 is attempting to reach up to its pre-2000 levels of 20K and the Hang Seng continues to run towards 30K. European markets continue to ride and near massive highs as well.

Checking in on commodities, oil has plunged from last June of 2014 where we saw $110/barrel+ oil. Currently, oil is just over $51/barrel. Prices dropped as low as the mid $40’s until it recently took a breath back up to the low $50’s. Much controversy surrounds the oil industry as thousands continue to lose jobs over the lack of company profits due to the massive drop in price/demand. Continue to watch oil and the oil stocks make their march back to $100/barrel from this point on. Therefore, although we may enjoy the euphorically addicting low pump prices, don’t get hooked!


Gold checks in at 1233.20 a troy ounce and Silver weighs in at 17.47/oz after enjoying a nice little bump in today’s session. Platinum is up almost $10/oz to $1211.40 and Palladium is killing it up $18.20 to 792.90 a troy ounce.

As the major indices heat up, penny stock plays become an attractive option for many investors as well. There have been many hot Penny Plays lately and can be seen at www.StockMarketMonitors.com. Check out THCZ, SUTI, RCHA, ENIP, GRCU, ERBB, HEMP, CBIS, and MJNA. The Marijuana Sector has been rumored to begin a 2015 Pot Stock Rally and certain stocks are certainly showing these indications.

Traders should be advised that All Markets will be closed on Monday for Presidents Day.

 

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