3 reasons why Californians shun quake insurance

  Why Californians don't buy quake insurance NEW YORK (CNNMoney) Even though 90% of the earthquakes that strike the United States are located in California, only about 10% of homeowners there have earthquake insurance. What gives?

Here are three reasons why many quake-prone Californians shun insurance:

1) Quake damage rarely exceeds deductibles.

Some argue the insurance is not worth the money for homeowners. Earthquake insurance generally comes with a deductible of 15% of the home's value, according to John Rundle, a professor of physics at the University of California, Davis.

"Most homeowners will never exceed the deductible even if they do get damage," he said.

Most policies are purchased from the California Earthquake Authority, a privately funded, publicly managed organization that was created by the state legislature after severe losses in the Northridge quake threatened to send private insurers packing.

Glenn Pomeroy, CEO of CEA, said he would love to have a zero deductible, but that would make the premiums unaffordable for homeowners. Check out what you would pay on the CEA calculator.

The big deductibles mean money that would have gone to paying insurance premiums might be better spent being invested in temblor resistant home retrofits, according to Rundle. Homeowners could get their houses bolted to bedrock, for example, or braced and reinforced to prevent them from shaking apart.

2) Californians were slammed by the housing bust.

Many Californians were hurt by the real estate crisis and have little or no home equity -- or are underwater on their mortgages.

Jason Simpson, a computer programmer in Sherman Oaks, Calif., outside Los Angeles, bought his $690,000 home with a 3% down mortgage in 2008. The housing bust pushed him underwater -- he soon owed more on his loan than his home was worth.

"With no equity, there was no reason to drop $1,200 a year," he said.

If the big one had hit, he would have simply walked away from his mortgage. Now, however, as home prices have rebounded and he has added on to the h! ouse, he's preparing to buy insurance.

3) Mistrust of the California Earthquake Authority's support.

Another factor discouraging homeowners from buying coverage is that the CEA would stop paying claims if catastrophic earthquake losses exceed the the Authority's reserves.

Pomeroy said that homeowners shouldn't worry. Even though, just like any insurer, CEA would stop paying claims once its ability to pay was exceeded, it won't happen. CEA is very well capitalized, he said.

"We could handle two Northridges," he said, about the costliest earthquake in U.S. history.

"I don't lose sleep worrying whether we have enough money to pay claims, I worry because so many people don't have coverage."

BlackBerry's Turnaround Is Worth Investing In

Blackberry (BBRY) seems to be returning from the wild blue yonder. The organization's turnaround looked realistic last month and it conveyed handsomely by posting Wall Street-beating numbers. Furnished with a partnership with Amazon.com (AMZN) and raid into new markets, it is likely that Blackberry will have the capacity to sustain its marvelous run. A closer take a gander at the organization's strategies will make it clear why Blackberry can turnaround.

Some positives

Blackberry revealed net income of $23 million, significantly cutting its year-prior loss of $84 million. This profit might be ascribed to the cost-cutting measures received by CEO John Chen. Despite the fact that its revenue fell considerably year over year, going ahead, the organization is wagering on new devices and new markets to reignite development

The latest results have also offered certainty to investors, who were at first skeptical as to whether administration's turnaround efforts will yield any soil grown foods. Yet, after Blackberry reported its results, its shares rose surprisingly, demonstrating that Wall Street has confidence in the organization's rebound.

Impressive moves

Blackberry made significant progress on various fronts. In the Blackberry Enterprise Service (BES) office, it saw a strong interest for its EZ Pass project, which is uplifting news as Blackberry is seeing robust adaptation with this item. Also, with the dispatch of BES 12, it has officially stowed six beta customers. Indeed, the organization has six more beta installations probable starting July.

The organization's smartphone strategy is also looking solid. Blackberry as of late propelled its new smartphone, the Z3, in Indonesia in the midst of extensive promotions. Interest for the telephone was exceptionally strong as stock ran low amid dispatch day. The Z3 is a funding item that is designed to speak to customers in the developing markets. So, in the wake of getting a positive response in Indonesia, the Z3 will also be propelled in Vietnam, India, and various other developing markets.

Going ahead, the organization has arranged considerably all the more energizing item launches. Blackberry will dispatch another gadget called Passport, which is the organization's version of a phablet . Its different launches for the fiscal year incorporate BBM for Windows, Bes12, and QNX Cloud. So, the organization has a strong item guide that should help it convey strong development going ahead.

The Amazon partnership

An alternate uplifting news is that Blackberry has cooperated with Amazon for portable apps on Blackberry 10.3, which will include more than 240,000 Android apps to the stage. This looks like a smart move as Amazon's application store will strengthen Blackberry's scant and expensive application store. Likewise, Amazon will permit Blackberry to focus on apps for enterprises and businesses.

More moves

Blackberry is making its move into the cloud space by investing in Nanthealth. Nanthealth provides a cloud-based insightful medicinal services stage used to join physicians, patients, payers, researchers, and clinical labs. Using Nanthealth, Blackberry plans to use its QNX stage to power complex therapeutic devices, secure cloud-based networks, and permit secure trade of data over BBM secured.

Blackberry has also started a venture named Ion to focus on the Internet of Things. This involves a secure open cloud stage fueled by the QNX innovation, as well as the Blackberry Secure Enterprise Mobility Management. Once more, this looks like a smart move because the Internet of Things is relied upon to turn into a huge open door. As per Cisco, the Internet of Things will turn into a $19 trillion open door before the end of 2020. So, Blackberry is moving in the right course with this move.

Conclusion

Blackberry has started acting responsibly at last and it is making great progress. The organization's focus on trends such as cloud and the Internet of Things should help it improve over the long haul. Also, Blackbe

Why Small Caps Make Sense for Retirees

As investors approach retirement, many start dropping small-cap stocks from their portfolios in favor of investments that are considered more of a sure thing. Small caps may be great for growing your portfolio when you're young, they assert, but once you're retired you need to use a more conservative strategy. So they begin loading up on government bonds, established companies and other "safe" investments.

But in reality, the higher annualized returns from small-cap stocks can help prolong the life of a retirement portfolio and increase the annual safe withdrawal rate (SWR). Small caps are not just for young people seeking to grow their nest eggs, but also for retirees seeking to prolong their net eggs' life.

Intelligent stock selection matters a lot in maintaining that safe withdrawal rate, of course. But research by economists and finance experts shows that the payoff in terms of higher returns more than outweighs the slightly higher risks involved.

Research by Eugene Fama and Kenneth French has shown that small-value stocks have produced superior returns. They looked at the real (inflation-adjusted) performance of small-value stocks, large-capitalization stocks and intermediate-term government bonds going all the way back to 1927 and now carried forward to 2013.

The difference was significant: Small-cap stocks averaged a 16.2 percent return, larger stocks 9 percent, and intermediate-term government bonds 2.4 percent. So that's a 7.2 percent advantage for smaller stocks.

Small-cap stocks are typically more volatile than their large-cap equivalents, which can be unnerving for some investors. But as long as you maintain sufficient diversification in your portfolio, small-cap stocks can be a crucial ingredient in ensuring that your retirement income will be around for as long as you are.

After reviewing the historical record, there is a solid case for overweighting sma! ll-cap value stocks in retirement portfolios, even if there are future reductions in the premiums earned over large-company stocks. However, there is still considerable debate about whether small-cap value stocks truly provide excess returns when risks are appropriately recognized.

It’s important to distinguish between assertions made about small cap in general versus small-cap value, since the value category has performed better historically than growth on an absolute and risk-adjusted basis. There are indications that the small-cap category has performed about in line with stocks in general when adjusted for risk.

Larry Swedroe, for one, showed that between 1927 and 2012, small caps outperformed large caps by about 3%, but with virtually identical Sharpe ratios (a ratio developed by Nobel laureate William F. Sharpe to measure risk-adjusted performance). However, a Vanguard study of the period 1927-2004 showed small-cap value earning an average annual return of 15.1% versus 9.9% for growth, with similar standard deviations.

Financial planners have researched the role of the small cap in asset allocation, beginning with a 1997 article by Bill Bengen. His original research on the 4% rule used only large-cap stocks and intermediate-term government bonds, and he later determined that he could improve safe withdrawal rates (SWRs) by adding small-cap stocks to the mix.

Bengen used a small-cap category that included both value and growth and, based on historical data from Ibbotson, showed that SWRs increased from 4.1% to 4.3% by including small-cap stocks. He determined that including 30% small cap in the mix was enough to achieve the 4.3% SWR. Further increases did little to increase the SWR, so he settled on recommending a stock mix that included 30% small cap.

There is something special about small-cap value, and the question is whether its superior performance is likely to continue. Behavioral economists argue that that there is a bias against value stocks that giv! es rise t! o the return premium.

Obviously, older investors do have to be more cautious than younger ones, so smart stock selection is paramount. You'll find the best choices today in my Value Portfolio.

The Road Ahead

What's going to happen to the stock market in the near term? The market is likely to continue rising until "something" gives, either higher interest rates or lower corporate profits. In other words, that "something" may be unknown but it will be a negative event, whatever it turns out to be. So, risk is high and warning signs are flashing:

Stock trading volume is "dead." Almost nobody is buying and sellers have their hands on the sell button but waiting for a trigger.The largest buyers of stocks are the corporations themselves, which have a notoriously bad record of buying at market tops. The smart money (hedge funds, corporate insiders, and institutional investors) are currently net sellers.Merger & acquisitions (M&A) activity is at a seven-year high. Historically, extremes in M&A are correlated with market tops.Number of initial public offerings (IPOs) in the second quarter was the highest in 14 years and the number of IPOs in week of July 28th is the highest since August 2000.  Companies tend to go public when they think valuations are at their highest.Margin debt is declining, which historically signals increased investor risk aversion and results in a subsequent decline in equity prices.Corporate profit margins are at all-time highs and primed to revert back down to their long-term average level.The Bank for International Settlements stated that stock markets are "euphoric" and "detached from reality" thanks to the unsustainable easy-money policies of global central banks.Based on the Q Ratio (market price divided by asset replacement cost), the market is 80% overvalued.Market cap to GDP ratio of 114.5% is nearly two standard deviations above its mean and is higher than at any other market peak of the past 45 years except the Inter! net bubbl! e of 2000. 

I'm keeping a close eye on the Federal Reserve; a strong signal from the Fed that it's time to raise rates could have a huge impact. But for now, it's too soon to say that this bull market has no more room to run.

AAPL Leads These Three "Strong-Performing" Tech R&D Winners

Earlier this month, Sanford C. Bernstein, one of Wall Street's "top" research firms, concluded that there is no correlation between big research-and-development spending and stock performance.

The researchers at Bernstein, who studied R&D funding at technology companies, called their results "surprising."

They're not. Instead of spending valuable time and dollars, the Bernstein researchers could have figured all this out with a single phone call - to me.

As someone who's been in the technology trenches for the past 30 years, I know well that spending a ton of cash on research does not guarantee profits or stock-price appreciation.

What technology companies need are cost-effective research budgets.

To be fair, Bernstein's study sounds exhaustive. The researchers went all the way back to 1977 and measured results over time frames ranging from one year to a decade.

Of the R&D winners Bernstein listed, three are companies that I've recommended as portfolio-boosters in the past in Strategic Tech Investor. These are firms that use their research dollars wisely and get market-beating gains in return.

Today, I'm going to tell you about how all three should continue to be strong performers thanks to their effective R&D budgets. Plus, I'm going to tell you how all three are great ways to cash in on tech's continuing stock-market dominance...

Small Spenders

Don't get me - or the Bernstein report - wrong. R&D spending is still a vital part of the United States' status as the world leader in innovation.

A recent report from Battelle, the world's largest nonprofit R&D organization, further bears this out.

Battelle notes that the United States remains the "dominant force in global research across numerous industries." The report estimates total American R&D spending at $435 billion last year, up 1% from the previous year.

However, as tech investors, we're not looking for the firms with the biggest R&D budgets. We're looking for firms that most effectively use their R&D spending to produce.

Let me explain. Over my more than three decades as a tech investor, I've run into my fair share of companies I refer to as "R&D houses." By that I mean companies where sales and earnings seem to take a backseat to science and engineering.

The most famous example of this may be Eastman Kodak Co. (NYSE: KODK). While the rest of the industry jumped into digital photography in the early 2000s, these guys were tinkering away in their labs.

Ironically, Kodak invented the digital camera way back in 1975. Instead of using the technology to ramp up earnings, they let it slip through their grasp - and ended up in bankruptcy court in early 2012.

Thankfully, Bernstein's R&D winners, the companies I'm sharing with you today, are innovators, not tinkerers. And if you've been following STI for long, you know them well.

Let's take a look at them again now...

Tech R&D Winner No. 1: Apple (Nasdaq: AAPL)

Of course, we've talked about Apple Inc. (Nasdaq: AAPL) many times, most recently in June. The Cupertino, Calif.-based tech giant does a better job than anyone at coming up with game changers on a shoestring research budget.

This is the company that revolutionized mobile tech with the 2007 release of the iPhone.

According to the trade journal Apple Insider, Apple's entire R&D budget in the five years before the iPhone debuted was just $2.68 billion. That's a paltry $530 million a year.

And Apple is the largest tech company in the world.

Apple is ramping up its R&D budget these days for a couple of simple reasons. First, the tech landscape today is more competitive than it was in 2007, and so Apple needs to step up the pace of innovation to keep rivals at bay.

Second, the company has enormous amounts of cash on hand - near $160 billion. So it can afford to invest more in the next generation of tech products while ensuring that the spending is sustainable.

Apple spent $1.42 billion on product development in its fiscal 2014 second quarter ended March 30. That represents just 3.1% of net sales in the period, one of the lowest rates among big-cap tech leaders.

According to Bernstein, most tech companies spend 11% to 17% of revenue on R&D.

Even in the five years since Apple began seriously increasing its R&D budgets, AAPL stock has handed investors gains of more than 390%.

Tech R&D Winner No. 2: SanDisk (Nasdaq: SNDK)

We first talked about SanDisk Corp. (Nasdaq: SNDK) last August. My note to you suggested you buy this winner "before Wall Street gets wise."

I hope you acted on that advice. Because Bernstein's new study shows that the Street definitely sees this Silicon Valley firm as a winner.

Since our initial conversation about SanDisk, the stock has returned roughly 80% to investors. That's five times what the Standard & Poor's 500 returned in the period.

SanDisk ranks as a leader in flash memory for mobile devices. Tablets and smartphones cannot operate with a spinning hard drive like you find in most PCs and laptops.

The answer is solid-state memory that SanDisk pioneered. The devices can store massive amounts of content on a memory card the size of a postage stamp.

In this year's first quarter, SanDisk greatly outspent Apple on an R&D ratio basis. SanDisk devoted nearly 13% of sales in the period to laying the groundwork for new products.

But it's still a big winner because SanDisk spends its money wisely. It managed to match Apple's operating margins of 28% even as its research budget measured much higher on a percentage basis.

Tech R&D Winner No. 3: Akamai Technologies (Nasdaq: AKAM)

In late June of last year, I told you that I expected technology to have a great performance for the second half of 2013.

Back then, the market was in turmoil and many feared a possible correction. I said the opposite would occur and told you to keep an eye on Akamai Technologies Inc. (Nasdaq: AKAM).

I cited the Cambridge, Mass.-based Internet services company as a potential big winner in cloud computing, where vendors provide data and applications to their clients via remote data centers.

Had you invested in Akamai at the time, you would have made nearly 43% on your investment, a little more than double the S&P 500's return in the period.

The Bernstein study cites Akamai as one of the big outperformers because of its terrific financial performance and low R&D spending - among the lowest third in the study.

In this year's first quarter, Akamai invested just 6% of sales in research. That puts it between Apple and SanDisk.

And in terms of size, its $10 billion market cap is just 2% that of Apple's. But the much smaller Akamai spends its money almost as efficiently, with operating margins of 26.5%.

These efficiencies show that all three of our R&D winners have plenty of upside left. Each keeps coming up with profitable new products without just dumping money in their labs.

Any one of these three stocks - AAPL, SNDK, and AKAM - would provide a significant boost to your portfolio.

Our tech R&D winners' sustainable rate of research spending means better products for their customers - and a killing for their investors.

Don't Miss Today's Top Investing Story: We'll be booking Texas-sized profits from this huge pure play. And according to Money Morning's Global Energy Strategist Dr. Kent Moors, it's the best "quick-hit" investment opportunity he has ever seen...

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Battelle-R&D Magazine: Global Funding Forecast Predicts Cautious Growth for Research and Development Activity in 2014

Barney Frank Cheers FSOC for Role in Money Market Fund Overhaul

Former Rep. Barney Frank, D-Mass., said Wednesday that he supported the Securities and Exchange Commission moving ahead in passing a final money market fund rule and credited intervention by the Financial Stability Oversight Council for pushing the rule into being.

“We are going to get some regulation of money market funds now because of the FSOC, because they intervened,” Frank told members of the House Financial Services Committee, of which he was chairman, during a hearing titled "Assessing the Impact of the Dodd-Frank Act Four Years Later."

The outspoken former congressman also commented on several other aspects of the financial reform law that bears his name, including SEC fiduciary rulemaking and mortgage-related rules.

As to money market funds, the group of 10 regulators that form FSOC voted in late 2012 to advance three reforms to the funds after former SEC Chairwoman Mary Schapiro — a member of FSOC at the time — had failed to get three commissioners at the agency to support her proposed reforms. Schapiro stated at the time the issue of money market fund reform “is too important to investors, to our economy and to taxpayers to put our head in the sand and wish it away.”

However, current SEC Chairwoman Mary Jo White said during her remarks before the Senate Banking Committee last March that money market funds are “investment products and the SEC should take the lead” in writing further rules to reform them. White then made issuing a final money market fund rule a priority for 2014.

Frank also told reporters after his testimony that he believes the SEC should move forward with a rule to put brokers under a fiduciary mandate, calling the rulemaking an “important” part of Dodd-Frank. He added that regulators like the SEC and Commodity Futures Trading Commission would be “much” further along in their Dodd-Frank rulemakings if they hadn’t been “starved” by GOP lawmakers for funds.

During comments regarding his namesake financial reform bill, Frank also said Wednesday that he didn’t believe that “asset managers or insurance companies that just sell insurance are systemically important,” and should not be labeled as systemically important financial institutions (SIFIs) by the FSOC.

In response to a question by Rep. Scott Garrett, R-N.J., chairman of the Capital Markets Subcommittee, as to whether it was his intention that a nonbank designated by FSOC as a SIFI be regulated as a nonbank SIFI "in perpetuity," Frank responded: “No. I’ve been very skeptical of them [FSOC] doing that,” adding that he’d sent a letter to FSOC regarding the issue.

One of the most important “pieces” to the Dodd-Frank Act is “risk retention in mortgage lending,” Frank said, as the ability to make bad loans was at the root of the financial crisis. “I’m troubled that there won’t be more risk retention," he said. "That was the single biggest issue [in the law], and I’m a little nervous as to what’s happened to it.”

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Check out SEC Approves Tighter Money Fund Rules on 3-2 Vote on ThinkAdvisor.

We’re Back: Russell 1000 Growth Finally Breaks Dot-Com Bubble High

This just in: The Russell 1000 Growth Index just hit an all-time high of 925.98. Now this isn’t just another all-time high, the way we’ve been getting them in the S&P 500 and the Dow Jones Industrial Average, which have hit multiple highs this year. This is a big deal.

Getty Images

The reason: The previous high in the Russell 1000 Growth Index was back in March 2000–right at the peak of the dot-com bubble. That means it’s taken nearly 14-and-a-half years for the index to finally scale those heights.

The Russell 1000 growth index is chock full of big tech companies like Apple (AAPL), Microsoft (MSFT), Verizon Communications (VZ) and Google (GOOG).The big difference now is that these types of stocks actually make oodles of money and trade at (more) reasonable valuations.

Those stocks are also big components in the Nasdaq 100 and Nasdaq Composite indexes–just about the only major U.S. indexes that have yet to hit their all-time highs.

They’re not that far away, however. The Nasdaq Composite is up 0.4% at 4526.58 at 2:39 p.m. today, leaving it just 13% away from its record high of 5,132.52 hit in March 2000. The Nasdaq 100, meanwhile has gained 0.5% to 4,038.45 today, leaving it just 19% below its record of 4,816.35.

Who thinks they’ll get there before this bull run is over?

Shares of Apple have gained 1.4% to $100.51 today, while Google has risen 0.8% to $586.85, Microsoft has advanced 0.6% to $45.09 and Verizon has dropped 0.3% to $48.62.

Julian Robertson Buys Tableau Software, Facebook, Netflix, Sells Ulta Salon, EBay, EQT

Legendary investor Julian Robertson (Trades, Portfolio) just reported his second quarter portfolio at Tiger Management. The portfolio is primarily Mr. Robertson's personal investment.Mr. Robertson is regarded as the founder of the whole hedge fund industry. He had tremendous success from 1980 through 2000, when his flagship fund compounded 31.5%, and his assets grew from a few hundred million to $26 billion in 2008.In addition to his own success with his fund, Mr. Robertson has taught and seeded a group of hedge fund managers who are called Tiger Cubs or Tiger Seeds. Many of the Tiger Cubs are also great investors and have been very successful on their own. GuruFocus tracks the portfolios of a few of them, including John Griffin (Trades, Portfolio) of Blue Ridge Capital, Lee Ainslie (Trades, Portfolio) of Maverick Capital, Andreas Halvorsen (Trades, Portfolio) of Viking Global, and Steve Mandel (Trades, Portfolio) of Lone Pine Capital.Julian Robertson (Trades, Portfolio) buys Tableau Software Inc, Facebook Inc, Netflix Inc, Citigroup Inc, Gilead Sciences Inc, Google Inc, etc. during the 3-months ended 06/30/2014, according to the most recent filings of his investment company, Tiger Management. As of 06/30/2014, Tiger Management owns 49 stocks with a total value of $274 million. These are the details of the buys and sells.New Purchases: NFLX, C, MU, USAK, P, CVLT, BIDU, NLSN, RCL, HMTV,Added Positions: DATA, FB, GILD, GOOGL, ENSG, ESCA, SXC, NXPI, ADSK, GIMO,Reduced Positions: VLO, DAL, POST, AAL, GLPI, FNF, ETFC, AMD, CTXS, CALX, DWRE,Sold Out: ULTA, EBAY, EQT, MET, HIMX, NAV, ADTN, TTWO, BRCD, BID, SPLK, ARMH, BLOX, RKUS, CVT, MRVL, TXTR, ARCP,For the details of Julian Robertson (Trades, Portfolio)'s stock buys and sells, go to http://www.gurufocus.com/StockBuy.php?GuruName=Julian+RobertsonThese are the top 5 holdings of Julian Robertson (Trades, Portfolio)1. Gilead Sciences Inc (GILD) - 443,911 shares, 13.4% of the total portfolio. Shares added by 28.55%2. Tableau Software Inc (DATA) - 348,000 sh! ares, 9.1% of the total portfolio. Shares added by 2900%3. Facebook Inc (FB) - 341,500 shares, 8.4% of the total portfolio. Shares added by 1776.37%4. Delta Air Lines Inc (DAL) - 561,485 shares, 7.9% of the total portfolio. Shares reduced by 24.68%5. Google Inc (GOOGL) - 32,896 shares, 7.0% of the total portfolio. Shares added by 61.29%New Purchase: Netflix Inc (NFLX)Julian Robertson (Trades, Portfolio) initiated holdings in Netflix Inc. His purchase prices were between $314.21 and $448.68, with an estimated average price of $377.79. The impact to his portfolio due to this purchase was 4.7%. His holdings were 29,000 shares as of 06/30/2014.New Purchase: Citigroup Inc (C)Julian Robertson (Trades, Portfolio) initiated holdings in Citigroup Inc. His purchase prices were between $45.68 and $49.58, with an estimated average price of $47.57. The impact to his portfolio due to this purchase was 4.6%. His holdings were 267,800 shares as of 06/30/2014.New Purchase: Micron Technology Inc (MU)Julian Robertson (Trades, Portfolio) initiated holdings in Micron Technology Inc. His purchase prices were between $21.13 and $32.5, with an estimated average price of $27.18. The impact to his portfolio due to this purchase was 0.59%. His holdings were 49,300 shares as of 06/30/2014.New Purchase: USA Truck Inc (USAK)Julian Robertson (Trades, Portfolio) initiated holdings in USA Truck Inc. His purchase prices were between $14.82 and $19.24, with an estimated average price of $17.18. The impact to his portfolio due to this purchase was 0.49%. His holdings were 71,933 shares as of 06/30/2014.New Purchase: CommVault Systems Inc (CVLT)Julian Robertson (Trades, Portfolio) initiated holdings in CommVault Systems Inc. His purchase prices were between $46.07 and $70.8, with an estimated average price of $53.9. The impact to his portfolio due to this purchase was 0.42%. His holdings were 23,500 shares as of 06/30/2014.New Purchase: Pandora Media Inc (P)Julian Robertson (Trades, Portfolio) initiated holdings in Pandora Media Inc. His p! urchase p! rices were between $22.17 and $31.74, with an estimated average price of $26.06. The impact to his portfolio due to this purchase was 0.42%. His holdings were 39,500 shares as of 06/30/2014.New Purchase: Baidu Inc (BIDU)Julian Robertson (Trades, Portfolio) initiated holdings in Baidu Inc. His purchase prices were between $143.51 and $184.96, with an estimated average price of $163.28. The impact to his portfolio due to this purchase was 0.42%. His holdings were 6,100 shares as of 06/30/2014.New Purchase: Nielsen NV (NLSN)Julian Robertson (Trades, Portfolio) initiated holdings in Nielsen NV. His purchase prices were between $42.68 and $48.42, with an estimated average price of $46.52. The impact to his portfolio due to this purchase was 0.32%. His holdings were 18,000 shares as of 06/30/2014.New Purchase: Royal Caribbean Cruises Ltd (RCL)Julian Robertson (Trades, Portfolio) initiated holdings in Royal Caribbean Cruises Ltd. His purchase prices were between $50.75 and $57.12, with an estimated average price of $53.82. The impact to his portfolio due to this purchase was 0.13%. His holdings were 6,400 shares as of 06/30/2014.New Purchase: Hemisphere Media Group Inc (HMTV)Julian Robertson (Trades, Portfolio) initiated holdings in Hemisphere Media Group Inc. His purchase prices were between $10.91 and $12.63, with an estimated average price of $11.8. The impact to his portfolio due to this purchase was 0.09%. His holdings were 19,287 shares as of 06/30/2014.Sold Out: Ulta Salon Cosmetics & Fragrances Inc (ULTA)Julian Robertson (Trades, Portfolio) sold out his holdings in Ulta Salon Cosmetics & Fragrances Inc. His sale prices were between $84.79 and $100.11, with an estimated average price of $89.99.Sold Out: eBay Inc (EBAY)Julian Robertson (Trades, Portfolio) sold out his holdings in eBay Inc. His sale prices were between $48.25 and $56.04, with an estimated average price of $51.79.Sold Out: EQT Corp (EQT)Julian Robertson (Trades, Portfolio) sold out his holdings in EQT Corp. His sale prices were bet! ween $98.! 65 and $109.84, with an estimated average price of $105.31.Sold Out: MetLife Inc (MET)Julian Robertson (Trades, Portfolio) sold out his holdings in MetLife Inc. His sale prices were between $49.19 and $56.55, with an estimated average price of $52.46.Sold Out: Himax Technologies Inc (HIMX)Julian Robertson (Trades, Portfolio) sold out his holdings in Himax Technologies Inc. His sale prices were between $5.94 and $11.98, with an estimated average price of $8.02.Sold Out: Navistar International Corp (NAV)Julian Robertson (Trades, Portfolio) sold out his holdings in Navistar International Corp. His sale prices were between $31.93 and $38.35, with an estimated average price of $35.47.Sold Out: Adtran Inc (ADTN)Julian Robertson (Trades, Portfolio) sold out his holdings in Adtran Inc. His sale prices were between $21.29 and $26.11, with an estimated average price of $22.64.Sold Out: Take-Two Interactive Software Inc (TTWO)Julian Robertson (Trades, Portfolio) sold out his holdings in Take-Two Interactive Software Inc. His sale prices were between $18.81 and $22.38, with an estimated average price of $20.45.Sold Out: Brocade Communications Systems Inc (BRCD)Julian Robertson (Trades, Portfolio) sold out his holdings in Brocade Communications Systems Inc. His sale prices were between $7.99 and $10.84, with an estimated average price of $9.21.Sold Out: Sothebys (BID)Julian Robertson (Trades, Portfolio) sold out his holdings in Sothebys. His sale prices were between $37.91 and $44.8, with an estimated average price of $40.69.Sold Out: Splunk Inc (SPLK)Julian Robertson (Trades, Portfolio) sold out his holdings in Splunk Inc. His sale prices were between $40.39 and $74.9, with an estimated average price of $52.43.Sold Out: ARM Holdings PLC (ARMH)Julian Robertson (Trades, Portfolio) sold out his holdings in ARM Holdings PLC. His sale prices were between $42.83 and $52.82, with an estimated average price of $46.45.Sold Out: Infoblox Inc (BLOX)Julian Robertson (Trades, Portfolio) sold out his holdings in Infoblox Inc. Hi! s sale pr! ices were between $12.17 and $21.32, with an estimated average price of $17.18.Sold Out: Ruckus Wireless Inc (RKUS)Julian Robertson (Trades, Portfolio) sold out his holdings in Ruckus Wireless Inc. His sale prices were between $8.96 and $12.3, with an estimated average price of $10.6.Sold Out: Cvent Inc (CVT)Julian Robertson (Trades, Portfolio) sold out his holdings in Cvent Inc. His sale prices were between $23.25 and $36, with an estimated average price of $28.27.Sold Out: Marvell Technology Group Ltd (MRVL)Julian Robertson (Trades, Portfolio) sold out his holdings in Marvell Technology Group Ltd. His sale prices were between $14.18 and $16.23, with an estimated average price of $15.41.Sold Out: Textura Corp (TXTR)Julian Robertson (Trades, Portfolio) sold out his holdings in Textura Corp. His sale prices were between $14.23 and $25.3, with an estimated average price of $20.3.Sold Out: American Realty Capital Properties Inc (ARCP)Julian Robertson (Trades, Portfolio) sold out his holdings in American Realty Capital Properties Inc. His sale prices were between $11.94 and $14.13, with an estimated average price of $12.86.Added: Tableau Software Inc (DATA)Julian Robertson (Trades, Portfolio) added to his holdings in Tableau Software Inc by 2900%. His purchase prices were between $54.13 and $81.18, with an estimated average price of $62.56. The impact to his portfolio due to this purchase was 8.8%. His holdings were 348,000 shares as of 06/30/2014.Added: Facebook Inc (FB)Julian Robertson (Trades, Portfolio) added to his holdings in Facebook Inc by 1776.37%. His purchase prices were between $56.14 and $67.6, with an estimated average price of $61.42. The impact to his portfolio due to this purchase was 7.95%. His holdings were 341,500 shares as of 06/30/2014.Added: Gilead Sciences Inc (GILD)Julian Robertson (Trades, Portfolio) added to his holdings in Gilead Sciences Inc by 28.55%. His purchase prices were between $65.48 and $83.02, with an estimated average price of $77.76. The impact to his portfolio due t! o this pu! rchase was 2.98%. His holdings were 443,911 shares as of 06/30/2014.Added: Google Inc (GOOGL)Julian Robertson (Trades, Portfolio) added to his holdings in Google Inc by 61.29%. His purchase prices were between $518 and $585.93, with an estimated average price of $551.75. The impact to his portfolio due to this purchase was 2.66%. His holdings were 32,896 shares as of 06/30/2014.Added: Ensign Group Inc (ENSG)Julian Robertson (Trades, Portfolio) added to his holdings in Ensign Group Inc by 97.1%. His purchase prices were between $22.04 and $30.93, with an estimated average price of $25.43. The impact to his portfolio due to this purchase was 0.47%. His holdings were 84,950 shares as of 06/30/2014.Also check out: Julian Robertson Undervalued Stocks Julian Robertson Top Growth Companies Julian Robertson High Yield stocks, and Stocks that Julian Robertson keeps buying

SolarCity Stock Retreats as Revenue, Guidance Come Up Short

Popular Posts: 5 Stocks to Buy for AugustWhy You Must Sell Your Medical Marijuana Stocks NOW!The Top 10 S&P 500 Dividend Stocks for March Recent Posts: Between China and the U.S., McDonald’s Is Not Lovin’ It SolarCity Stock Retreats as Revenue, Guidance Come Up Short 21st Century Fox – Gushing Cash, But Little Else to Love (FOXA) View All Posts SolarCity Stock Retreats as Revenue, Guidance Come Up Short

SolarCity (SCTY) stock slipped a day after earnings, as lower-than-expected revenue and a disappointing forecast overshadowed a surge in new orders. SCTY fell more than 1% on the opening bell Friday.

SolarCity stock represents the largest U.S. solar company by market cap, but after a couple of years of ballistic gains, it has developed bipolar disorder in 2014.

Sure, SolarCity stock is up 30% for the year-to-date, but it was down as much as 15% just a couple of months ago. Heck, SCTY is still 14% below its April high.

Partly, that volatility because the market has turned on last year’s red-hot momentum stocks, but it doesn’t explain all the crazy action. Then again, anyone holding SolarCity stock has to be comfortable with the fact that outsized growth comes with higher costs and wider losses.

Profitability is secondary to hitting user-base targets. Indeed, SCTY is projected to lose $1 billion over the next three years as it builds out rooftop power projects for homes and commercial buildings.

When SCTY gets its business up to scale, that’s when it’s time to lose patience with losses. After all, multi-decade leases are a key part of its revenue plan. But as the market in SolarCity stocks shows, sometimes waiting is the hardest part.

For the most recent quarter, SCTY said revenue rose 62% to $61.3 million on “unprecedented demand.” The company signed up 30,000 customers in the second quarter alone, tripling results in the same period a year ago.

The downside of all this growth is that costs are piling up faster too. SCTY posted a much wider net loss of  $47.7 million, or 52 cents per share, in the most recent quarter. A year ago, SolarCity lost $39.5 million, or 52 cents.

The market applauded the news and gave SolarCity stock a little bump because, after excluding certain items, the loss came to 96 cents per share, which beat analysts’ forecast by 3 cents.

SolarCity Stock Dinged By Revenue, Guidance

As welcome as the earnings beat is for anyone holding SolarCity stock, there were still plenty of quarterly blemishes. As fast as the company added customers, revenue still fell short of Wall Street projections.

More worrisome is that SCTY issued disappointing current-quarter guidance. SolarCity now expects to book an adjusted loss of $1.10 to $1.20 per share. Analysts were modeling a loss of just $1.

Anyone holding SolarCity stock had better be in it for the long haul. After all, the company sure is. SCTY is very much in its infancy. All its energy is focused on growing the business — signing up customers and making acquisitions. Profits are only a promise at this point.

Furthermore, after last year’s huge run in SolarCity stock, it’s natural that 2014 would be something of a hangover year. That has been the pattern for SCTY stock ever since its late-2012 IPO — extended periods of huge gains followed by months of steep selling.

And yet, after all those rallies and plunges, SCTY stock is still up more than 500% since its IPO. If nothing else, the market hasn’t lost faith in this story.

Just be forewarned: If you want a piece of SolarCity stock, be frosty and be patient. It’s going to be a volatile ride for the next few years at the very least.

As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.

IBM builds a brain out of computer chips

IBM's new computer chips can sense, taste, feel, smell and hear like a brain. NEW YORK (CNNMoney) IBM has built a computer chip that functions like a brain.

It can sense, taste, feel, smell, hear, and understand its surroundings.

One day, IBM (IBM, Tech30) says the chips might be used to build a thermometer that can "smell" what disease you have and let you know if you need to see the doctor. Or they could be built into a spherical robot that finds people on search and rescue missions. Or they could be included in glasses for blind people -- the glasses might be able to "see" what's in front and speak directions to the person wearing them.

That's up to developers. For IBM's brain-like chips to see the light of day, software and hardware engineers will have to write programs for the chips and build them into devices.

None of those things are possible with today's computer chips. The processors you have in your laptop or smartphone are really good at making lightning-fast computations, but they're really bad at making sense of the world around them. That's because most chips today are capable of making just one calculation at a time.

Our brains don't work like that. They have multiple "cores" making decisions and inferences at the same time. One part of the brain might see blue, another might hear waves crashing, another might smell sea salt, and your brain simultaneously merges those senses to determine that you're at the beach.

That's kind of how IBM's new chip works.

Each chip has 4,096 cores, 1 million "neurons" and 256 million "synapses." That means each core functions at about the scale of a worm brain, and each chip works at about the same level as a bee brain. Put lots of these chips together, and things get really interesting.

Amazingly, the chips are so low-powered, they can easily run on a smartphone battery. But they pack a punch: They're capable of 46 billion synaptic operations per second per watt. That's supercomputer-like.

"It's a supercomputer the size of postage stamp, the weight of a feather and runs on the power of a hearing-aid," said Dharmendra Modha, chief scientist for brain-inspired computing at IBM Research. "It's a genuinely ra! dical innovation."

IBM's research was published in Science magazine Thursday.

The chip was the result of 10 years of research from IBM, $53 million in funding from DARPA, and 200 people working on the project.

"Designing this chip was no cakewalk," said Modha. "Many thought it was impossible. The impossible has now become possible. We hope the possible will someday become real."

Diversified End-Markets Make This Chipmaker a Solid Investment

Maxim Integrated (MXIM) didn't do very well last quarter as its revenue declined. This decline was anticipated by management, as its consumer business was facing seasonal weakness. However, the gains from the initial ramp of a new smartphone at its largest customer arrested the decline.

Maxim gets most of its revenue from its computing business. However, due to weakness in the U.S. OEMs for its server and notebook business, this business didn't do too well. However, the gains in the automotive segment signal that the company has solid room for growth in its core industrial business in the future.

Growth drivers

Maxim's growing communication business cannot be neglected, either, which is benefiting from the strength in base stations due to China's 4G LTE deployments and cable infrastructure products. Maxim saw strength in bookings, which created a massive backlog in the quarter. Based on these facts, the company is anticipating revenue of $635 million to $665 million in the ongoing quarter.

It is counting on the analog market, where it seems to be in a good position to take advantage of the present trends. Maxim, with its unique position in the industry, has built a strong portfolio of products and capabilities. With such an active portfolio, the company expects to provide a best-in-class system level integration to customers.

The company is noticing the positive impact of these efforts in markets such as automotive, industrial, communication and data center. In addition, its mobility segment is also running along nicely. With increasing content in smartphones, tablets and e-readers, this segment is expected to gain steam in the coming days.

Maxim sees solid opportunities in the automotive market as well due to growing demand for processors and sensors. Further, with several design wins in the medical segment, the company has another growth outlet.

Customer ramps will drive performance

Moving ahead, Maxim is expecting growth in revenue in the June quarter because of opportunities in the consumer market. The company lined up shipments for its major customers for their latest generation smartphones. Moreover, Maxim is focusing on various other initiatives, on the back of which, it is aiming for a solid financial performance in the future.

As the mobile market is gaining steam, Maxim is expanding its technology offering for mobile devices. In this regard, Maxim is entering the market with a strong portfolio, including power management, optical sensors, MEMS, audio amplifiers, and audio products. The company sees growth opportunities in audio amplifiers. Besides, Maxim also expects growth in the sensor market, which can be a key growth driver.

China in focus

The prime focus of Maxim remains on China and particularly on the mid-range smartphone market as a majority of the customers are interested in low- and mid-range products in China. Having achieved new power SoC wins, the company is well positioned to leverage its systems expertise that it employs in high-end smartphones for mid-range phones, as these phones are richer in their feature set.

Also, Maxim is seeking to expand its business to other areas. Beyond smartphones, it is trying its hand in games, tablets, e-readers, and wearables. All these efforts by the company are a part of its diversification strategy.

Conclusion

Maxim is well-positioned to deliver growth across several markets. The company's innovations and illustrious customers put it in a strong position to achieve growth in the long run. So, investors should consider Maxim Integrated for their portfolio as it can