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Wednesday, December 18, 2013

What is More Profitable Than Apple? What else?

What is more profitable than Apple?  Oranges?



Well it is Samsung.  Samsung shipped 88 million phones vs Apples 33.8  million only Apple controls only 13.4 % of the smartphone market down from l5.6% .  In  Q3, Samsung shipments grew by 55%.  Samsung earned $ 7.6 last quarter vs $7.5 of Apple.  Which is the better bet?  Where would you invest?













From: Uncommon Wisdom Daily <eletter@e.uncommonwisdomdaily.com>

Date: Mon, Nov 18, 2013 at 9:35 PM

Subject: More Profitable Than Apple











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Uncommon Wisdom
Monday, Nov. 18, 2013

Snooping Out the Smartphone Trends

by Tony Sagami
Dear Subscriber,

As soon as I push the "send" button on this e-mail, I'm heading home from my 21-day research trip to Australia, including stops in Perth, Adelaide and Sydney.

It was one of the best investment prospecting journeys of my career. It was also full of surprising stories and ideas and observations that I can't wait to share with you.

You already saw my comments on Australia's hot real estate market and the recently-discovered biggest oil find in 50 years. My International ETF Trader and Blue-Chip Option Alert subscribers are right now taking advantage of the specific opportunities I found.

Today, I'll tell you what I learned about the global battle for smartphone and tablet device domination.

Turning What You May Believe Upside-Down

From one end of the Australian land mass to the other, I spent days meeting with government officials, corporate managers, bankers, real estate experts, and some of the most-successful money managers in Australia.

I'm not a poker player but I've been doing this long enough that I can tell when CEOs and CFOs are telling the truth or shoveling horse manure. There is no substitute for what you can learn from sitting across the table, asking tough questions, and watching how people respond.

(By the way, I recently attended a body language interpretation course designed specifically for Wall Street analysts. The instructors were ex-CIA agents who are the best interrogators in the world. The skills they taught me are already proving extremely valuable!)

I can't begin to tell you the wealth of information I uncovered in Australia. ...

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So far the results have been remarkable ... leading them to rack up 16-straight winning trades for a cumulative 299.3% return in the last 2 months alone. That crushes the S&P by an incredible 63-to-1!

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Some of the best, most actionable information didn't come from company executives or government leaders — but from regular, ordinary people like you and me.

The truth is I am just a big snoop. I will talk up just about anybody who might help me make a buck. Some of the most valuable information comes from taxi drivers, bell captains, retail clerks, blackjack dealers, waiters, semi-truck drivers, and university students.

For example ...

  • When I wanted to know how U.S. fast-food brands like KFC and Pizza Hut were doing in China ... I went into half a dozen Chinese KFCs and talked to people working there and some of the customers.
  • When I wanted to know how Las Vegas Sands and Wynn casinos were doing in Macau ... I went there myself and talked to blackjack dealers, pit bosses, a limousine driver patiently waiting for his high-roller client, and some cocktail waitresses.
Interrogating Apple

I use the same kind of grassroots research to gather data on heavy equipment producers, luxury goods providers, semiconductor companies ... you name it. Today I'll tell you what my boots-on-the-ground research says about Apple (AAPL).

As I mentioned, I traveled to three Australian cities: Perth, Adelaide and Sydney. All three have Apple retail stores. I went to each store in each city three times each. Fortunately, I didn't see any explosions — but I learned a lot!

While I wanted to see how many customers were buying Apple products, I also pumped unwitting sales clerks for information. I tried to detect larger patterns with casual questions like ...

  • "I was in the Hong Kong Apple store last year and it was so packed you could hardly move. Is this a pretty normal amount of customers or are you usually busier?"
  • "Were you working here last year? Are you guys doing more or less or about the same amount of business as a year ago?"
  • "Is the new iPad Air really so much better than the old iPad? Are you selling lots of them?"
  • "I love my iPhone but a lot of my friends are switching to the Samsung Galaxy 4. What makes the iPhone better?"
What did I learn by visiting three Apple stores and talking to around a dozen Apple sales clerks? Here is my conclusion:

A regular day at the Apple store in Sydney
  • Apple is doing well in Australia ... but not nearly as well as last year.
  • The Samsung Galaxy 4 is dramatically eating into Apple's business!
Some recent numbers bear this out. According to research firm Strategy Analytics, Samsung shipped more than 88 million smartphones in the third quarter.

That's a lot of smartphones — but numbers always need context. Look what else we know:

  • Samsung's 88 million deliveries means they more than doubled the 33.8 million Apple iPhones shipped in the same period.
  • In Q3 2013, Samsung shipments grew 55% from the same period last year.
  • Samsung now has a 35% share of the smartphone market.
  • Apple market share is 13.4%, down from 15.6% a year ago.
These giant sales increases are turning into huge profits for Samsung. They've now booked more profits than Apple for two consecutive quarters!

That's right. The mass media loves to tell you how wildly profitable Apple is ... but Samsung is making even more money! Last quarter Samsung reported US$ 7.6 billion of profits compared to Apple's US$ 7.5 billion.

After officially kicking Apple's butt in the smartphone market, Samsung is turning its attention and resources to the tablet business. Their latest devices are getting rave reviews.

If profits follow consumer satisfaction, Samsung is on the way to tablet market dominance.

How to Follow the Trend

Which stock is the better investment? There is ZERO question in my mind that Samsung is a superior stock to own.

However, Samsung Electronics trades mainly on the South Korean stock exchange (005930.KS). You can also find it on the U.S. "pink sheet" over-the-counter market under the symbol SSNLF.PK.

Use caution: SSNLF.PK only trades about 20 shares a day. It is very illiquid, so the only practical way for U.S. investors to buy Samsung shares in on the Korean stock exchange. Not every U.S. brokerage firm will do it.

Additionally, even if your broker can get to the right exchange, Samsung's stock price is around US$1,400 per share. Yup, one thousand four-hundred dollars per share.

One alternative: You can buy the iShares MSCI Korea Index ETF (EWY). This ETF trades in the U.S., is liquid and easy to buy. Samsung accounts for around 23% of the ETF holdings.

EWY is not a pure play on Samsung, but it is a pretty darn good proxy.

WARNING: I'm not suggesting that you rush out and buy Samsung Electronics stock tomorrow morning. As always, timing is everything so you should wait for the stock to go on sale.

Even better ... I've uncovered a much better, back-door way to profit from Samsung's booming sales growth. I'm checking on a few details before I make a recommendation to my subscribers.

I hope you'll consider joining my investment family as we exploit one of the best smartphone investment opportunities I've ever found.

Best wishes,

Tony



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Tony Sagami is the editor of Blue-Chip Option Alert, a trading service designed to help investors profit from the seemingly unstoppable Asian consumption machine. He helps his subscribers tap into this potential through a variety of easy-to-execute strategies on global companies that trade on the U.S. exchanges that also do big business in Asia.

Tony is also the editor of International ETF Trader, where he shows members how to make money from trends taking place all over the world in areas like natural resources, gold, oil, commodities, tech, consumer goods and even in individual countries themselves.


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