Tech Giants Crush Earnings Report Expectations

This was a huge week for giant tech companies including Apple, Google, Microsoft, Facebook, and Amazon just to name a few. They all released their quarterly earnings statements, and they all beat expectations. Many of the companies reported huge double digit growth. A full list of the different companies that reported their earnings this week can be found online.

Amazon (AMZN) for example performed better than expected and just reported a 44% increase in their revenue. The bar was set high for them this year with expectations for their Q1 revenue to be $104.57 billion. Amazon had first-quarter revenues of $75.5 billion last year and they absolutely demolished expectations when they reported $108.5 billion for Q1 this year. Their earnings per share (EPS) are $15.79 versus the $9.69 that was expected.

Alphabet Inc (GOOG), which is Google’s technical corporate name, also reported fantastic numbers. They were expected to have an EPS of $15.82 and they almost doubled it by reporting and EPS of $26.29. Alphabet’s revenue for Q1 was $55.31 billion vs. $51.70 billion expected. Google’s revenue rose 34% from the same period last year. The good financial news caused their stock price to skyrocket overnight from around $2,300 per share up to above $2,400 per share.

Tesla (TSLA) was another company to beat Wall Street expectations this week. Estimates for their EPS were expected to be 0.79 and they actually reported 0.93 this quarter. Tesla’s revenue was $10.39 billion vs. $10.29 billion expected. This is up 74% from a year ago. Unlike Alphabet and Amazon that experienced a sharp rise in their stock price, Tesla has been on a downward slope ever since reporting their earnings.

Some analysts are skeptical about Tesla because they had some other ways of generating revenue besides normal car and solar panel sales. Tesla made a profit of $101 million this quarter from selling some of the Bitcoin it had previously invested in. Tesla also recorded $518 million in revenue from sales of regulatory credits during the period. The company did this while also delivering a record 184,800 Model 3 and Model Y cars.

The tech sector all had an amazing quarter, including Tesla. They beat their record of vehicles delivered in a quarter while making some smart business decisions to generate extra capital. What are your thoughts on Tesla and all the other earnings reports that were released this week? Leave me a comment and let me know.

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Friday’s Market Update

This week was full of ups and downs in the stock market and especially in the cryptocurrency market. This week’s biggest story was Dogecoin. The Dogecoin story started last week on 4/15 when the joke cryptocurrency started rapidly rising in value. I go into detail about Dogecoin’s attempt to shoot for the moon in my previous post, “Dogecoin to the Moon… and Back. Signs of a Crypto Bubble?“.

Dogecoin experienced explosive growth of more than 450% in less than a week, peaking in value around $0.42, with the culmination supposed to happen this past Tuesday, 4/20. The hype train was trying to convince people the price of Dogecoin would go up to $0.69 on 4/20 (clearly a lot of financial analysis went into coming up with that valuation and timeframe…). “Dogeday” as it was being called was an absolute bust and as of 1am on 4/20, the price of Dogecoin (DOGE) was on a downhill rollercoaster and it is currently trading around $0.23.

In other cryptocurrency news prices for almost all cryptos, including Bitcoin and Ethereum, took a plunge in value over the weekend and they still haven’t recovered. Ethereum (ETH) briefly recovered and actually reached a new high when it was trading around $2,600. Bitcoin on the other hand has dropped even more from its weekend dip. Bitcoin slipped under $50,000 for the first time in almost two months, and it’s still hovering around $50,000.

Thursday afternoon, the stock market looked like it jumped off a cliff after news leaked from the White House that President Biden is looking to implement a massive tax hike on companies and wealthy individuals. The leaked report suggested Biden was considering increasing the capital gains tax rate on those earning more than $1 million to 39.6%. The current base capital gains tax rate is 20%. The response on Thursday seems to have been an overreaction because the stock market is doing very well today, Friday.

This has been an exciting week, especially in the cryptocurrency market. Next week should be interesting with mega-cap companies like Apple, Amazon, Google, and Facebook will be releasing their first quarter earnings statements. The earnings from these giants will surely have an impact on the overall markets so I’ll be sure to keep you up to date. Don’t forget to follow my blog so you can stay informed on everything investment related.

Photo by Vance Alm

Investing 101: Dividends

What are dividends? A dividend is the distribution of some of a company’s profits or earnings to its shareholders. Dividends are generally paid out on a regularly scheduled basis, this typically happens quarterly. Not all companies pay dividends though so this is something important to look out for in the stocks your choose to invest in.

Companies that pay dividends are usually the larger, more established companies with more predictable profits. These companies are often in the banking, utilities, or oil and gas industries. Because growth is generally slower in these industries compared to the technology or biotech sectors, they use dividends as a way to attract investors. Dividend payments vary in amount from company to company, they can even vary in the same company but they are usually between 1%-5%.

Choosing a dividend stock can be tricky because you want to balance a good dividend yield with a strong company that has a stock price that could still potentially rise in value. Chevron (CVX) is one of the best value dividend stocks because of it has a long history of dividend growth. Chevron currently offers a dividend yield of 5.11%. The pharmaceutical company AbbVie (ABBV) has 8 successive years of dividend growth with a dividend yield of 4.73%. Verizon (VZ) has a dividend yield of 4.38% and it has raised dividends in the past 8 straight years.

What are your thoughts on dividends? Do they help influence you to choose a certain stock to invest in? Leave me a comment and let me know your thoughts on dividends. Don’t forget to follow my blog so you can stay up to date on the latest investing news.

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Dogecoin to the Moon… and Back. Signs of a Crypto Bubble?

I’ve been writing a lot about cryptocurrency lately because I feel like that is all you hear about in investing news. But Dogecoin showed everyone why when the price of 1 Dogecoin (DOGE) skyrocketed 203% in just 24 hours. Within the past week, Dogecoin has had an insane 452% increase. Its value reached its peak early this morning, and it has been on a downhill slide since then. Besides making people kick themselves for not investing in this earlier, this spike has also raised questions and worries about a potential bubble effect in the crypto market.

Dogecoin was literally created as a joke, and it now has a market value of over $40 billion. This spike has added over $20 billion to Dogecoin’s market value. The fact that Dogecoin doubled in value has people asking why this happened? There are multiple factors that played into this rapid spike in value, but the popularity effect might be one of the biggest reasons.

Cryptocurrency has been all the rage over the past couple weeks with Bitcoin hitting its record of more than $64,000 per coin and Ethereum reaching it new record when it topped $2,500. Part of this crypto craze was Coinbase releasing their DPO on Wednesday. Clearly, there has been a lot of excitement around cryptocurrencies building over the past week. All of this combined with Dogecoin’s biggest supporter, Elon Musk, sending out the tweet pictured below where he said, “Doge Barking at the Moon”, sparked people to go crazy with buying Dogecoin.

Tweet by Elon Musk on Twitter

I unfortunately was jumping on the Dogecoin bandwagon too late and the fact that it had such a dramatic spike which is being immediately followed by a slow crash makes me very wary about buying in at its peak price. In my previous blog post, “How to Buy Bitcoin and Use Coinbase“, I talked about buying Bitcoin (which has been hovering around its peak price) which I view as a more long term investment because it has so much big institutional support, with strong potential to become an actual widely used currency. Dogecoin on the other hand, I view as more of a quick trading asset.

What are your thoughts on Dogecoin? Are you buying some and hoping it keeps shooting to the moon? Leave me a comment with your thoughts on Dogecoin, Bitcoin, and cryptocurrency overall. Is it all a hype bubble that will burst soon?

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How to Buy Bitcoin and Use Coinbase

In my last blog, “Coinbase, Bitcoin, and Crypto are All Going Crazy“, I discussed Coinbase’s DPO that was released on Wednesday, 4/14, and all the hype around its launch and the cryptocurrency market in general. I mentioned that I’ve been keeping a close eye on the cryptocurrency market but I was still skeptical (mainly for not investing sooner). But I finally jumped on the bandwagon and downloaded Coinbase and bought some Bitcoin. I also bought a share of Coinbase (COIN) while I was caught up in the excitement of finally joining the crypto craze.

I’ve used a few different stock trading apps but this the first time I’ve used a cryptocurrency exchange and the process to get started was super simple. First, download Coinbase from your app store and enter your name, email address, and create a password. Then, you enter your bank information or debit card information, this is different than most brokerage apps that require your bank account and routing number. Although, you’re only allowed to buy cryptocurrency when you enter your debit card. You need to enter your bank account information in order to sell, that way the money can be transferred into your bank account if you choose to cash out.

Once you have a form of payment linked to your account, you’re all ready to join the crypto craze! Coinbase’s homepage shows you your portfolio balance, your watchlist, top movers, and some news articles related to cryptocurrency. The tab to the right of the homepage is the Portfolio page, which shows the number of coins, fractions up to eight decimal points over, of Bitcoin or whichever cryptocurrencies you own. This page also shows a line graph displaying the your portfolios performance. The middle blue button is like a quick buy/sell button. The tab to the right of the middle button is the Prices page and displays prices for a huge variety of different cryptocurrencies. This page has tabs towards the top where you can choose to see the top gainers and losers for the day. The last tab on the bottom right is the Settings page that contains your account information, settings, and a help/support section.

I’ve kept a close eye on Coinbase’s share price all day and it was hovering around $333 this morning but then dipped down to around $324 in the later afternoon. I jumped in and bought the dip, so hopefully the price doesn’t drop anymore. I been hearing analysts talk about this stock price possibly going up to $500 in the future. If people are literally buying into the crypto craze like I am, I’m hopeful Coinbase continues its strong growth which will fuel their stock price’s rise.

What are your thoughts on Bitcoin, Coinbase, and cryptocurrencies? Leave me a comment and let me know. Don’t forget to follow my Twitter where I’m constantly posting about investing, the stock market, and cryptocurrency.

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Coinbase, Bitcoin, and Crypto are All Going Crazy

Coinbase, Bitcoin, and cryptocurrency in general has been in the news nonstop lately. Bitcoin is at its all time highs hovering around $63,000. Visa is piloting transaction settlement in stablecoins on the Ethereum blockchain, and Ethereum is now trading at its highest prices ever, trading around $2,400. Big banks like JP Morgan and Morgan Stanley are now offering their customers opportunities to invest in cryptocurrency through ETFs. Huge companies like Tesla and Apple have jumped on the cryptocurrency bandwagon and have invested billions of dollars into purchasing Bitcoin.

Cryptocurrency exchanges, such as BlockFi, Gemini, and Coinbase, allow how retail investors can buy Bitcoin and other cryptocurrencies. Coinbase (COIN) is among the more popular crypto exchanges and it went public today, 4/14/21, in their highly anticipated direct listing IPO. Shares initially had a target price of $250 early this morning but by the time it actually started trading it opened at $381 and quickly rose up to $429, hitting a valuation above $112 billion. Share prices sank throughout the day and ended at $328.28 by the closing bell.

Coinbase (COIN) has been the biggest IPO of the year with many experts valuation of them exceeding $100 billion. The Coinbase direct listing IPO offers investors the opportunity to enter the realm of crypto without actually purchasing any actual cryptocurrency. Personally, I am still hesitant on jumping into Bitcoin (mainly because I regret not purchasing some 6+ months ago). But I like idea of investing in a crypto exchange and with Coinbase being one of the biggest names in the game, I would like to invest in this one. I’m going to keep a close eye on this hot IPO and give it a couple days to cool off to see where the price goes before buying any shares. What do you think about cryptocurrencies and Coinbase’s IPO? Please leave me a comment with your thoughts, and if you like my blog, share it on social media!

Photo by Vance Alm

Good Friday Wraps Up An Interesting Week on Wall Street

There’s no trading in the stock market today because of Good Friday, but there’s been a lot of little stories that have happened this week that I wanted to discuss. The biggest news this week was definitely President Biden’s announcement of his infrastructure plan. I went into detail about his proposal in my last blog “Investing in President Biden’s Infrastructure Plan“. If this plan is put into action, there will be great opportunities to invest in multiple different industries.

Other big news this week was the when the massive cargo ship Ever Given was finally freed from blocking the Suez Canal. The Ever Given had become lodged sideways, blocking the Suez Canal for nearly a week and stopping all international shipping in the area. The debacle started on March 23 and after seven days of dredging and using tugboats, it was finally dislodged on March 29. This blockage caused at least 400 boats to be rerouted and hundreds more were stuck waiting to be able to pass through the canal. Due to the amount of products and materials that were stuck at sea, this blockage cost an estimated $9 billion each day in delayed global trade. The situation is under investigation by the Suez Canal Authority.

The brokerage app Robinhood was in the news again this week but it wasn’t about GameStop or its highly anticipated upcoming IPO. Robinhood is being sued by rapper Ice Cube for trademark infringement. Ice Cube filed a federal lawsuit on Wednesday, March 31, accusing Robinhood of damaging his reputation by using his image to promote its products without his consent. Ice Cube claims the trading platform is retaliating against him for his association with Jeff Kwatinetz, his business partner and his civil rights attorney who was involved in a separate lawsuit against Robinhood over the GameStop controversy. Ice Cube is asking the court for an injunction requiring Robinhood to stop using his likeness and also for unspecified monetary damages.

There were some big IPOs that dropped this week including the online learning platform Coursera (COUR) and the newest addition to the ARK Invest ETF lineup, the ARK Space Exploration & Innovation ETF, or ARKX. Both of these IPOs have had a pretty good first week and they are trading higher than their IPO price. ARKX is managed by famed investor and CEO & CIO of ARK Invest, Cathie Wood. ARKX has received mixed reviews and some criticism over the ETF containing some names like Netflix and Amazon that don’t really have anything to do with space exploration.

It was definitely an interesting week on Wall Street. I will continue to update you with all the latest news and information from around the investment world. Make sure to follow this blog and my other social media platforms. Have a great weekend!

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Stocks Versus ETFs: Which is Better to Invest In?

Well first off, what is an ETF? ETF stands for exchange traded fund and they are assets typically comprised of stocks from multiple companies bundled together. ETFs can also be made up of commodities, bonds, or a mixture of investment types. ETFs are traded on exchanges just like stocks are. The Standard and Poor’s 500 Index, or S&P 500, by far the most famous ETF. The S&P 500 represents the 500 largest companies and is often used as a measure for how the U.S. economy is doing.

What is the best ETF? There is no right answer for that. There are numerous different types of ETFs that you could potentially invest in such as bond (might include government, corporate, or state bonds), industry (track a particular industry such as technology, banking, or the oil sector.), commodity (gold, oil, etc.), and currency (Euro, Yen, etc.) ETFs. There are even inverse ETFs comprised of stocks you’re shorting.

So what exactly is a stock? Stocks are shares of a publicly traded company that people can buy and sell on exchanges like the NYSE and Nasdaq. Companies that want to sell stocks go through an IPO process where they are valuated and establish a number of shares they want to allow the public to purchase. Once a target IPO price is established and they can start being traded, then it’s up to the supply and demand of shares that drives stock prices up or down.

Now that we’ve clarified exactly what the difference is between the two, which is better? That depends on your strategy. Purchasing stocks gives you the opportunity to focus on the companies that stand out within their given industries or that you feel are undervalued. ETFs are good for the longer term and a good way to diversify your portfolio because they can give you access to many stocks across various industries.

I currently don’t have any ETFs in my portfolio but I am going to start researching them more. I’ve been keeping an eye on ARKK and ARKF, both are popular tech ETFs managed by famous investor Cathie Wood. What are your thoughts on ETFs vs. stocks? Leave me a comment and let me know. Follow my Twitter @VanceAlm where I’m constantly posting articles and blogs about news in the financial word.

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Are We About to Have a New Crash in the Stock Market?

Monday, 2/22/21, was a rough day for the stock market. Almost every company in every industry on the tickers were red, from tech to automotive to retail, red EVERYWHERE. An example of the huge changes was Tesla starting Monday’s trading around $771 per share but by the end of the day it would drop to around $650. Many companies, especially in the tech sector, have had a rough week. Throughout the week, the market has started to somewhat settle, but if you look over the past 1-3 months, many companies are on a downward slope coming off record high prices. What is causing this huge downturn in the market?

The post Covid-19 boom is getting people excited about the possibility of being able to live life normally again. This excitement along with the increased availability of the Covid-19 vaccine has made people optimistic about companies being able to open up and operate like normal. This has caused people to invest back into recently forgotten industries such as retailers, airlines, cruise lines, hotels, and casinos which may have driven the market up prematurely. Since most of those industries are still not operating at full potential due to Covid-19 restrictions, this has led to large sell offs.

Another big factor potentially causing the downturn is fears of inflation and rising interest rates. When interest rates rise, people usually spend less and save more. The fact that the government has been giving away multiple stimulus packages and has plans to continue doing so has raised concerns about inflation because so much money has been created and pumped into the system. Raising interest rates is usually how the federal government would keep inflation low, by essentially encouraging saving instead of spending. This fear has caused the Federal Reserve Chairman, Jerome Powell, to come out on Wednesday and tell Congress that the central bank will not raise interest rates until they believe they have reached their goals on maximum employment and inflation.

When Federal Reserve Chairman, Jerome Powell, said they will not raise interest rates, this caused a sigh of relief on the stock market and trading and prices have started to go back up over the past couple days. The question now is how long will interest rates stay low and is it better to buy stocks now during higher volumes of trading or wait for prices to drop when interest rates do actually rise? Let me know your thoughts and leave a comment, are you investing now or waiting?