The largest company in U.S. history... The next big innovation from Apple... A special presentation from Doc Eifrig... What happens if Greece leaves the EU?... Not much, according to Tepper... Business trumps politics...
One of our highest-conviction ideas became the most valuable company in the history of America yesterday...
Consumer-products giant Apple closed at $122.02 yesterday, pushing its market capitalization to more than $700 billion – the first U.S. company to achieve the milestone.
The stock is up another 1.5% today as of midday trading (bringing the market cap to more than $720 billion) after investment bank JPMorgan raised its year-end price target for the company from $140 to $145... Analyst Rod Hall is bullish on the launch of the company's "smartwatch." He increased his 2015 and 2016 earnings-per-share estimates.
To use the Apple Watch, you need an iPhone 5 or newer. Hall estimates there will be 400 million iPhone users by next month. He sees that number rising to 525 million by year's end and to 627 million by the end of 2016.
He expects 5% penetration for the Apple Watch this year (or 26.3 million units).
The Apple Watch will likely be a success for Apple... Selling 26.3 million units at a launch is a huge number. But it's still a ways off from the 74.5 million iPhones Apple sold in the fourth quarter of 2014 – when it earned $18 billion (the highest quarterly earnings in corporate history).
Everybody is talking about the Apple Watch. But we don't think it will come close to generating as much cash for Apple as another product it recently launched...
Have you used Apple Pay yet?
It's the mobile-payment application available on the new iPhone 6 and iPhone 6 Plus. And it's going to be huge...
Mobile payments will revolutionize the payments space just like credit cards did... and might even make cash obsolete one day.
According to credit-card giant Visa, Americans are now twice as likely to carry a mobile phone as they are to hold cash. Those between the ages of 18 and 34 are four times as likely.
People today are glued to their cell phones... They're never out of arm's reach. Mobile payments take advantage of the ubiquity of cell phones... and make paying for goods and services more convenient.
Now, you can load multiple credit cards, debit cards, rewards cards, etc. on your phone... You don't have to pull out your wallet and fumble through pieces of plastic. You just wave your cell phone over the payment processor and voilà, the transaction is done.
Plus, mobile payments are much more secure than credit cards. I won't go into much detail about the technology here, but I do want to share some numbers...
Already, Apple Pay is responsible for 50% of mobile purchases at fast-food giant McDonald's. And Apple Pay is already working with 90% of the country's most-used payment cards.
Plus, the technology is still in its early stages.
In 2012, only 120 million cell phones were equipped with the technology for mobile payments. That number doubled to 275 million in 2013. And according to research firm IHS Technology, that number will grow four-fold to 1.2 billion phones by 2018.
Media website Business Insider says use of in-store mobile payments will grow 4,200% by 2018.
Even the government is signing on... President Obama signed an executive order mandating that certain government agencies ready themselves to accept mobile payments.
You can, of course, buy shares of Apple to profit from this trend. The company receives $0.15 for every $100 spent using Apple Pay. Given the massive growth potential in this market, that royalty alone will add a fortune to Apple's bottom line.
Apple is a great buy today, regardless of Apple Pay. Dr. David "Doc" Eifrig rates shares a "Strong Buy" today. And in the January 28 Digest, Extreme Value editor Dan Ferris explained why he believes Apple is a $1 trillion company... and laid out a few steps Apple could take to boost its share price.
But there are other companies making the "guts" for mobile-payments technology that will absolutely soar as this technology goes mainstream.
Again, we're still in the early stages of this trend... Before too long, mobile payments will be just as ubiquitous as credit cards.
Consider this... Major credit-card companies are mandating the use of a certain technology that enables mobile payments at merchant locations throughout the U.S. by October. In other words, credit cards see the future... and they're going all in.
Doc Eifrig just put together a report explaining the details of mobile-payments technologies, the huge growth potential, and some of the major players involved.
It's a great and fast way to learn everything you need to know about this new technology.
In the report he also shares the names of the companies that will profit the most from this growing technology.
The informative presentation Doc prepared is free for everyone to watch. It's a fascinating look into the future of mobile payments... and what the world will look like going forward.
To gain access to the names of the specific companies Doc recommends to profit, you need to subscribe to Retirement Millionaire. Right now, you can sign up for a 100% risk-free trial subscription for just $39. That's an incredible value for one of the best financial advisories available today... Plus, getting in on the ground floor of this long-term megatrend could pay for your subscription several times over.
You can watch Doc's presentation by clicking here. (If you don't want to sit through the promotional video, you can read the text at your leisure right here.)
Greece is still locked in negotiations with the European Union (EU) over the country's bailout, which expires on February 28. The EU wants Greece to agree to austerity measures in order to extend the bailout.
Greece doesn't want to extend the bailout. Instead, it wants a bridge agreement that will allow the country to pay its bills until it can agree on a four-year reform plan with the EU.
Some folks are worried that Greece will leave the EU and that the euro could dissolve. Others think fears are overblown. In Monday's Digest, we told you why Steve Sjuggerud is actually bullish on the euro: In short, because all the bad news is already priced in.
This morning, hedge-fund billionaire David Tepper – one of the most influential men in finance – spoke to CNBC about the situation with Greece. He said an agreement would "obviously be good for the markets," but said stocks "could survive even if it goes the other way."
Tepper said stocks could fall a few percent after the initial shock of Greece leaving the EU, but ultimately it's "not a big deal... the market will be fine this year."
Think back to the political crises we've had over the years... The repeated increases to the U.S. federal debt ceiling, the government shutdown, the 2011 European crisis... These were all overblown. The market continued rising. As Dan Ferris wrote in a classic essay which appeared in the March 6, 2012 DailyWealth, "shopping trumps politics."
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So a "Grexit" could roil the markets temporarily... But do you think it will have lasting, long-term implications for a business like Apple? New 52-week highs (as of 2/10/15): Apple (AAPL), CME Group (CME), CVS Health (CVS), Esperion Therapeutics (ESPR), iShares U.S. Home Construction Fund (ITB), PowerShares Buyback Achievers Fund (PKW), and Constellation Brands (STZ). In today's mailbag, a reader gives kudos to Jeff Clark's Direct Line blog. Have you used Jeff's real-time advice to make extra money in the market? Send your success stories to feedback@stansberryresearch.com. "I wanted to send over a little praise for the Stansberry Short Report given the publication's tough year with the measurable recommendations on the Report Card. Jeff's Direct Line is a huge part of the service and his scalp trades have been profitable on an extremely consistent basis. I am sure the Stansberry Short Report's grade would be much higher if the scalp trades could be tracked. I am continually amazed at how good Jeff is at sizing up the S&P and determining where it is likely to move within its trading channel. I would personally give the Direct Line an 'A+'. Thanks to Jeff for his diligent work!" – Paid-up subscriber Joe
Regards,
Sean Goldsmith
February 11, 2015
