Computer Games

In This Issue: Computer Games Playing China's New Game You've Been Replaced That's what large truck drivers and train operators in one country have been hearing lately. A wave of robot technology has been unleashed on one unlikely industry, and the results have been shocking. One company has 150 of these massive robot-driven trucks on order. Another is expanding its fleet to 45. That's no wonder when you know at least one of them is sitting on $2 billion in cash thanks to cost savings. All told, this situation could hand investors gains of 450%, 637%… even 737%. I'll give you seven ways to make that happen when you click here. Computer Games 11/25/2014 By Thomas Scarlett Few companies have ever dominated their era as much as Microsoft (NSDQ: MSFT) did in the 1990s. The flannel-shirted computer programmer remains an iconic symbol of that era's business world, just as much as men in dark suits walking into the General Motors building represent the 1950s. But have the times passed Microsoft by? We keep hearing about the death of the personal computer, which has been the scene of Microsoft's greatest triumphs. Apple, which once trailed its Seattle-based competitor badly, is now the visionary in the industry, and is now the world's most valuable publicly traded company. But reports of the death of the PC may have been premature. Younger consumers have been switching over to various mobile devices at a steady rate, but businesses and older consumers continue to provide a substantial ready-made market for Microsoft software. The rate of decline in personal computer sales is projected to flatten out for the remainder of 2014, noticeably less than its recent rate of around 10% annually. Perhaps more importantly, the company seems to have awakened from its slumber regarding what it saw as small market tech, and is getting very serious about the future of mobile and cloud computing. With the dominance the company has in PC production -- all of those PCs will require operating systems in order to run - and the number of units being sold projected at almost 300 million units, this leaves Microsoft considerable resources to retool with. Ironically, Microsoft crossed over from a pure software company to begin manufacturing their own Tablets, and with the purchase of Nokia will start making their own smartphones to boot. Microsoft, on the other hand, has a different competitive market they need to navigate. As Google recedes from the smartphone market with their sale of technology and patents to Lenovo, the market is already set to shift. What about cloud computing? Microsoft has entered into that market behind the leaders but has the cash flow to develop products that can generate even larger future revenues. The technological requirements for cloud are going to grow from the current server-based architectures in the marketplace. The cloud marketplace is growing from the infrastructure which exists in businesses today. The upshot being that public clouds will not dominate the marketplace anytime soon. All businesses today have tremendous investments in their current infrastructure. They will not simply dump those investments and move into a public cloud. The customization of their own software prohibits a dump-and-move dynamic in the marketplace for cloud. Rather, we will see a gradual shift for businesses from customized infrastructure into more flexible server architectures, which will produce more private clouds and increase hybrid clouds that companies will leverage to reduce cost and provide greater virtualization of their existing infrastructure. On Oct. 23, Microsoft announced revenue of $23.20 billion for the quarter ended September 30, 2014. Gross margin, operating income and earnings per share for the quarter were $14.93 billion, $5.84 billion and $0.54 per share, respectively. Devices and Consumer revenue grew 47% to $10.96 billion. "We are innovating faster, engaging more deeply across the industry, and putting our customers at the center of everything we do, all of which positions Microsoft for future growth,"said Satya Nadella, chief executive officer of Microsoft. "Our teams are delivering on our core focus of reinventing productivity and creating platforms that empower every individual and organization." "We delivered a strong start to the year, with continued cloud momentum and meaningful progress across our device businesses," said Amy Hood, executive vice president and chief financial officer of Microsoft. "We will continue to invest in high-growth opportunities and drive efficiencies across the organization to deliver long-term shareholder value." Interestingly enough, the gradual migration into private clouds is providing both Microsoft the market opportunity to again rise as a dominant force. The technologies which clouds require to scale and remain stable plays into the company's strengths compared to the new competitors in this space. One distinct possibility would be for us Intel and Microsoft to team up to develop designs which the smaller firms do not have the reach and resources to accomplish. "Customers are embracing our latest technologies from Surface Pro 3 and Office 365 to Azure and SQL Server," said Kevin Turner, chief operating officer of Microsoft. "Through great execution by our sales teams and our partners, we have been able to deliver our truly differentiated value to the marketplace." For all its strengths, Microsoft has a price-earnings ratio of just 19 -- a bargain. The company is worth buying up to 54. Tom Scarlett is an investment analyst with Personal Finance. One of the last safe places left when the markets are a bloody mess With the Fed's loose-cannon monetary policy… turmoil in Ukraine and Russia… and threats of ISIS, we now live in a world of increasing uncertainty. There's no telling what will happen in the markets in the next 12-18 months. But one sector has weathered the storm for the past 42 years. From 1968 to 2010, if you invested $10,000 in the market, you would have a nest egg of $637,408. Not bad. But Wall Street researcher James O'Shaughnessy discovered that if you invested the same amount in high-yielding utility stocks that scored well on a handful of valuation factors, you would have a whopping $5,716,872! Think about it. They've performed through seven recessions… stagflation of the '80s… a savings and loan crisis… war… a tech bubble burst… and a subprime crisis. A new $600 billion market is being created right now that almost guarantees this sector's performance through the next century. Get the full story here. Playing China's New Game 11/25/2014 By Richard Stavros China's been up to a lot lately, and it may pay dividends for investors who play it right. The country's move to lower interest rates to 5.6%, the signing of a climate pact with the U.S. and plans to stimulate its economy are actually just more tactical steps in a long-range plan to boost sagging growth as the country makes the transition to a consumer society. Challenges abound, and China will be highly volatile in the short term. It has to address slow factory growth, a stalled property market, and a banking sector that's increasingly burdened by bad loans. We think this environment favors multinationals in the short-term over private Chinese businesses and state-owned enterprises. Given the current shakeout that's happening by under performing private and state-owned businesses, it's too soon to pick winners in those two categories. In the long-term, all three business sectors---private, state-run and multinational---will benefit from the China-U.S. climate pact that will mean increases in energy investment. Clean tech infrastructure players such as General Electric (NYSE: GE) and home-grown Chinese renewable energy developers will get more business. China has pledged to build a national carbon market in 2016, which would put a price on carbon and motivate businesses to reduce their emissions. Of course, some critics think the terms of the pact are so vague China will emit as much as it wants to. And given early Republican criticism over the climate deal, we'll be watching closely to see whether the U.S.-China pact is blocked next year by the incoming Republican-controlled Congress. China on the Upswing? Source: Y Charts The Big Picture China's recent moves are just the latest changes in a much bigger strategy, known as the Third Plenum. This is designed to open the country's banking, energy and other key sectors to foreign investment, which represent the biggest expansion of China's markets since liberalization began decades ago. Will the Third Plenum pay off? Many investors are understandably hesitant to pile back into countries such as China, after emerging markets' stomach churning, wild ride over the last two years. This was driven largely by the Chinese economy's slowdown and fears that the nation was headed for a hard landing. So investors in China need to stay in for the long haul and understand that the market will continue to develop, albeit in fits and starts. Patience is the key. To capitalize on China's new reforms, we advise investors to first look at Western multinationals with China operations because they are already doing business there and their stocks are fairly-priced and easy to trade. Subscribers to Global Income Edge receive the full update, which lists multinationals on our portfolio that are best positioned to take advantage of China's reforms. This article originally appeared in the Income Without Borders column. Never miss an issue. Sign up to receive Income Without Borders by email. The investment that beats 94.5% of stocks It's up 15.2% a year for 10 years running. That's better than 94.5% of stocks. And that's only the "average" for this investment. The rest are so far ahead of stocks, it's ridiculous. Click here to learn more. You are receiving this email at benjamart.ss.stock@blogger.com as part of your subscription to Investing Daily's Stocks To Watch, published by Investing Daily. To ensure delivery directly to your inbox, please add postoffice@investingdaily.com to your address book today. Email Preferences | About Us | Premium Services | Contact Us | Privacy Policy Copyright 2014 Investing Daily. All rights reserved. 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