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Why I like tech stocks

Think Amazon. It sells a paper book at $20. It costs Amazon $15. Then it has to pack and ship the book, for free. Profit? Not much.

It sells a Kindle book for $20. It costs Amazon at most $15. Maybe 50 cents to store the book on its servers. It now has $4.50 in pure profit.

Think Apple. It sells equipment it has to design, make and deliver. But it also has Apple Store. I drop an app on the Store. Apple takes 30%. For storage and delivery. And $100 a year to be on the Store. Cost of that? Close to zilch.

Technology businesses are growable into the wild blue yonder — because we have the Internet and the Cloud. Facebook has two billion users. Boeing has to physically make planes if it wants to grow.  Home Depot has to open stores..  You get the idea.

Technology requires nimble management.

Apple recognizes its future lies in its Apple Store, which works because  it designed Apple phones to be receptive to outside applications. The phone and cable industry ignored that immense opportunity. Dumb management.

Think Netflix. Not so long ago it physically sent out DVDs of other people’s movies. Now it makes it owns movies and delivers them for free over the Internet, not via the Post Office.  Netflix reports on Monday after the close. All my friends are hooked on Netflix movies. I bet earnings are going to be great.

The good tech companies are not slouches. Our top five tech companies are our top five R&D spenders.

TopR&DSpending

This chart and more comment on is in Recode. Click here.

Tesla is not a tech company. It’s a manufacturing company.

Manufacturing is hard. Here’s what the Economist writes about Tesla:

The next circle of hell
Tesla is heading for a cash crunch
The road ahead for Elon Musk’s car company is looking more perilous

“WE ARE sad to report that Tesla has gone completely and totally bankrupt.” So tweeted Elon Musk, boss of the electric-car company, on April 1st. He even posted a picture of himself supposedly drunk and inconsolable as proof. It was meant as an April Fool’s Day joke, but the gag backfired. It is uncomfortably close to the truth. America’s leading manufacturer of electric vehicles is under pressure. Mr Musk is fighting battles on many fronts and they all exacerbate his main threat: a financial squeeze that could eventually push Tesla over the edge.

Even Tesla’s shareholders, who are rarely put off by bad news, are jittery. Its shares have fallen by 16% since the end of February, most steeply after a Tesla using the firm’s Autopilot software crashed into a roadside barrier in California on March 23rd, killing the driver and raising questions about the safety of its system for semi-autonomous driving. The crash is being investigated by the authorities.

You can read the rest of the Economist’s dreary piece here.

I’m not worried about Facebook

I am worried about how little our Congresspeople understand about technology.

There’s a good summary of this week’s hearing in Rolling Stone. Click here. 

My conclusions on FB and TSLA

Own a little stock in them.  I have faith in both Zuck and Elon. The stocks are heading to rocky shoals. Target your holdings for your children and grandchildren.

Useful stuff

+ Turn WiFi Calling on your cell phone. It will make your cell phone calls at home much better. Go to Settings, Phone and turn on WiFi calling. No charge.

+ Get your cable guy and ask him to replace all your corroded cable connections. The call is free. And your Internet will go at least 10% faster.

There you are. Two good things in life for free.

Health stuff:

+ I still haven’t read anything positive about  any dietary supplements, yet. I’m still hoping for the magic bullet.  So far, exercise, rest and eating little seem to work.

+ Teeth. After 75 years, I finally have nice teeth.

It started with bad genes, continued with an awful Australian dentist, then awful New York dentists, then, finally, a great Palm Desert, California dentist, Dr. Robert McLachlan.

So, the first rule is get yourself a decent dentist.

The second rule is get yourself armed with cleaning devices. You need three things: dental floss,  Gum Soft-Picks

GumSoftPicks

(click here) and a waterpik, namely this one:

Waterpik

To buy it, click here. 

The Eyesight Test

A Polish immigrant went to the DMV to apply for a driver’s license.
He had to take an eye sight test.
The optician showed him a card with the letters

‘C Z W I X N O S T A C Z.’

‘Can you read this?’ the optician asked.

‘Read it?’ the Polish guy replied, ‘I know the guy.’

Anniversary Confession

Maurice and Hetty were approaching their Golden wedding anniversary. One summer evening, they were taking a slow walk in their local park. Hetty suddenly takes her walking stick and hits Maurice hard across his back.

“What on earth did you do that for? It really hurts.” he shouts at her.

Hetty replies, “That’s for 50 years of poor sex.”

Maurice thinks for a while and then takes his walking stick and hits Hetty hard across her tuchas (Jiddish for butt) with it.

“Ouch,” she screams. “What’s that for?”

Maurice looks at her and replies carefully, “That’s for knowing the difference.”

HarryNewton
Harry Newton. Tomorrow, I’m heading back to cold New York from warm Coachella Valley, California. I’ve come to really like California. It’s much easier to live here than in New York City. People on both coasts are nuts, but in different ways. Big revelation!

  • TomFromVa

    Here’s one for your California nuts:

    The latest telephone poll taken by the California Governor’s office
    asked state residents if illegal immigration is a serious problem:

    29% of respondents answered: “Yes, it is a serious problem.”

    71% of respondents answered: “No es una problema seriosa.”

  • Lucky

    As much as I like the Tesla automobile I am sticking with my 2017 Subaru Outback Ltd…it carries a lot of non essential stuff between our two houses and is fun to drive and dependable. At 80 I fully expect it to outlast me! I became leary of Tesla when they started to have so many problems with the Model 3.