VOIP & Wireless Broadband – It’s a Small World After All

The following post is provided via the Gary Scott newsletter.  Gary lives and conducts business in a small town in Ecuador for a portion of the year, providing great insight into the ways technology is providing opportunities that were once impossible.  It truly is becoming a much small(er) world after all..

Technology Trends

We are traveling with a full house this week on our Import-Export Expedition. Yet wherever we go one great thing is that we are never far from home because of two evolving technologies.

With our tiny 12 inch by 12 inch, three pound plus laptops Merri and I can call my Mom, our kids, our friends or almost anyone, almost anywhere in the world, almost for nothing.

This is a trend that is transforming the utility of many people and places. This shift will create fortunes

We are visiting markets where one can buy organic Andean and Amazonian spices at low prices to pack and resell at high markups as part of our Import Export expedition right now.  We hope you will join us for our next expedition April 23-30.  Learn ways to have your own international business. See http://www.garyascott.com/catalog/expedition.html

We have turned an out-of-the way Blue Ridge Farm and a tiny Andean village into international business centers with this technology. Land that used to be worth a little is now worth a lot.  You too can cash in, if you figure out these dynamics before everyone else does.

VOIP (Voice Over Internet Protocol) and Wireless Broadband are changing the world. This knowledge is worth a fortune for more reasons than just the saved telephone tolls.

A few years ago I spoke at a seminar along with Ian Pierson the head futurist for British Telcom. One of the points he made was that he had advised BT (the largest phone company in the world) that within ten years they would not be able to charge for phone calls.

I wondered how this would take place. Now five years later, with VOIP, this is almost the case. Merri and I do not have a long distance carrier anywhere. We place all our calls through VOIP.

VOIP is a big part of the transformation, but wireless broadband is what really opens up this field.

We were lucky at our Blue Ridge farm because the telephone company decided to introduce DSL (telephone line broadband). This is because of the USDA (US Department of Agriculture) Rural Development Telecommunications Programs and Rural Development Broadband Loan and Loan Guarantee Program.

But most of the rural world does not have this type of politics at work. This is where there could be an even greater innovation, Wireless Internet Broadband (WIB).  WIB means that VOIP can be introduced quickly all over the world.

It is the combination of both technologies that give this evolution a one-two punch. WIB is the one of the two!

WIB is the best way to get broadband connectivity in rural and semi rural areas all over the world.

WIB is just like other internet plans, giving incredibly fast speeds and ‘always on’ features equal to cable or ADSL broadband technologies. However, the similarities stop there.

WIB customers connect to the internet wirelessly over the air, rather than through a phone line or cable. This means they get the benefits of broadband internet, plus freedom that only wireless internet can offer.

Years would have passed before wired broadband would have reached out tiny village of Cotacachi. Yet we have it now because all we have is a line-of-site radio tower.   

WIB is an ideal way for people who haven’t been able to get broadband otherwise. This is not satellite communication, but operates through tower transmitters just like cell phones. You get a very small dish pointed at a tower which may be miles away and viola! you have high speed always on internet.

This is great. I can communicate with you, my readers, all over the world through this amazing communications system. This is good enough but here is the #2 punch.

With VOIP my computer also becomes a phone. In North Carolina we use Vonage which provides a small computer box that connects to our computer and the phone.

In Ecuador we use SKYPE.  My computer and a headset is the phone.  We, in each case were allowed to choose a phone number anywhere in the world. We chose a Lakeland, Florida number so our daughter could call us with a local call.  But though she (or whoever) dials a Florida number, the phone (actually the computer) rings here in Ecuador (or wherever we happen to be) as long as we are connected to the internet.

Our calls out are extremely inexpensive. If we are calling someone who is also signed onto Skype, the call is FREE! Otherwise calling the US from Ecuador for example is about 2 cents a minute.

These two innovations change everything but I am not suggesting that you invest in VOIP or WIB businesses.

The big potential is from spotting how these two innovations change people, places and businesses. Look for distortions (as we have here) that are created by the change. For example, land here is cheap because it is viewed as remote.  Yet these technologies have erased the concepts of time and space! I can set up a business here with very low labor and real estate cost, but can serve clients in high cost areas! 

Here is another tip.  There will be two steps that take place in this evolution.  First, we will move from using computers to using interactive TV and the phone.

Too many people are afraid of computers because they are too user unfriendly. But everyone knows how to use the TV and the phone.

Second, we will shift from the typed word to voice. Not everyone can type but most of us can talk. These voice and gesture activated devices will be powerful in assessing your needs, sorting out data available and giving you a short list of useable information. You will no longer go to the net and ask a general question which may result in thousands of possible answers. You’ll be able to ask specific, personal questions and get personal, specific answers.

Look for ways that VOIP and WIB will change things and look for businesses that cash in on these easier to use interfaces.

These are trends that can make you rich.

It’s Been Confirmed – Nasdaq Breakout

It’s official, the Nasdaq has joined the breakout party enjoyed by both the Dow and the S&P over the past couple weeks…and it did so in impressive fashion as volume rose considerably higher than the day before.  If there was one area of concern, it was the lack of volume behind the advancing stocks in the SelfInvestors Leading Stock Index (the stats can be seen on the right there).  However, this is a big step towards a sustained breakout in the market… now lets see if the old resistance can be a new found source of support (another bullish indicator).  A few more moves like we had today and maybe the real estate speculators will continue to move money into the market!

No End in Sight to Rate Hikes

The market was looking for a party, but the Fed wasn’t in the celebratory mood.  It seems before every new Fed announcement on rates there are predictions that we’re in one and done mode.. or maybe one and another and done mode, or…  ah well, predictions never mattered anyway.  What’s important is that it’s clear the Fed doesn’t have any idea what the future holds as all decisions appear to hinge on the fluctuation of commodity prices, which as we know can be quite volatile.  The market was hoping for some sense of certainty today and once again didn’t get it and the market immediately sold off as volume picked up. While today’s negative technical action is fairly significant, we’re by no means in danger of breaking down.  Rememeber, that the first move after a Fed announcement is often misleading, so we’ll need a day or two to get a true sense of this market will hold up after the latest Fed decision.  Here’s a quick look at the charts:

You see the Nasdaq remains in consolidation mode, but the fact it has had 2 failed breakout attempts in addition to multiple distribution days in the last 2 weeks is a concern.  However, support levels remain intact, so we shall see.

In both the Dow and S&P, there remains quite a bit of wiggle room left before we need to be at all concerned.  Following today’s move, that momentum will most likely continue in the coming days and a test of support is a great possiblility.  Keep an eye on these key support levels.

Google Finance Launches – Nice Try

First impression – big deal.  For the casual user just looking to see how the stock has performed over a certain time period or looking for a basic stats and news page, it passes the grade. Sure the interactive chart is cutting edge, but it doesn’t provide even the basics for good technical analysis, such as the 50 and 200 day moving averages.  If StockCharts.com could incorporate that kind of interactivity into their charts, then you have something impressive.  The biggest problem with finance portals is that they do everything average and very little exceptional.

Finance and investing blog commentary and analysis is becoming increasingly relevant and Google recognizes this, but they have a loooong way to go before those results are relevant.  In the results for blog entries you’ll find spam blogs and product pages – not exactly authoritative commentary by any stretch.

In my opinion, the de facto standard right now is Yahoo Finance and it will remain so. 

You can check out the Google Finance beta here

Breakout Stock Highlights – CyberSource (CYBS)

The number of breakouts over the past couple of weeks confirms my suspicions that leading stocks aren’t leading.  It’s a surprising divergence.   Usually, with a rise in the markets like we’ve had, I’ll see maybe 40 or so breakouts over a 2 week period, not 17. 

Some Highlights:

  • Eleven breakouts finished the period with a gain, 4 with a loss and 2 finished flat.
  • The biggest winner over the period was one of the top ranked retailers in the database, Coldwater Creek (CWTR), which broke out to a 19% gain following another outstanding earnings report.
  • Two stocks win the coveted biggest loser award, dropping 9% each from their breakout points – Mesabi Trust (MSB) and LifeCell Corp (LIFC)
  • Glenayre Technologies (GEMS) is showing the greatest demand of the 17 breakouts over the past 20 and 40 days with DI Scores of 71 and 78, respectively.

For a screenshot of the short list of stocks breaking out with a combined fundamental and technical score of 50 or above, please visit the following page.

The screenshot shows only those breakouts with a combined fundamental and technical score of 50/60 or above.  To see the entire list as well as many other screens you’ll need to sign up for premium membership.

I’ve got some hoops to go watch so I just wanted to highlight one stock quickly that I think represents one of the best opportunities in the market right now.. I’ve been mentioning this one to my premium members over the past couple of weeks and it still remains in what could be called a "buyable range" (within a few percentage points of the breakout point of a long 2 year base).  Notice the up versus down volume, its outstanding and today’s reversal occurred with light volume so not much of a concern there.  Keep an eye on this one.  Have a good night.

3rd Time a Charm?

We find ourselves again on the doorstep of another major market breakout with the little bear on the shoulder saying "its gonna fail again, its gonna fail again".. I suppose the bit of uncertainty and fear of past failures is healthy and a necessary component of any bull run.  If I look just at price performance in the indices, I do the like the market here and think it has some legs, but the volume behind the moves of the past 2 days just doesn’t have me tripping over myself to push the buy button.  I’ll go ahead and insert the old cliche "cautiously optimistic" right here.  That’s where I’m at.  Easing back in to some positions. 

Looking at the chart of the Nasdaq, its clear that it has a lot to prove yet.  It’s still got a ways to go just to get to the top of that trading range.  On the positive side, it did bounce around the bottom of the trading range and volume has been increasing to the upside as it surged back above that upward trend line.  If the Nasdaq can break out of this trading range i’ll remove the cautious from my optimistic.

The Dow has been leading the market higher and that is a bit of a concern as traders have been moving to the more defensive blue chips of late.  I want to see smaller, new leaders emerge and lead this market higher.  There has been some of that in telecom and a bit in biotech, but the action seems more speculative rather than breakouts of new leaders.  By the way, where’s the conviction in that move in the Dow?  Each move up off support over the past week has been with at or below average volume.  Technically, the last 2 days could be called accumulation, but you really want to see the moves occur with above average volume.  I think many traders are waiting for that bust out confirmation move with huge volume before jumping in with both feet.  I know I am.

You can see the S&P bouncing off of support of the upward trend line and 50 DMA and breaking out of that "squeeze" I discussed in the last market report.  The S&P looks real good here as volume as picked up in the past 2 days.  Now let’s see if it can hold above this new found support area.

Today’s Earnings Movers

Here are today’s notable earnings movers (once again it’s mostly down):
Note: fundamental rank in brackets does not include latest results

UP

  • A.M. Castle (CAS) Basic Materials Wholesale, fundamental rank [26/30] up 8%, not going anywhere, in the process of carving out what will probably be a lengthy base
  • Ventiv Health (VTIV) Business/Management Services, fundamental rank [25/30] up 6%, continuing to tack on gains after breaking out a couple of weeks ago

DOWN

  • A.D.A.M Inc (ADAM) Internet Info Providers, [24/30], down 23%, another example of why it’s almost always a good idea to avoid holding these small growth companies through earnings

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You may like to check out a new post over at my new ETF portal site.  It takes a look at the PowerShares Clean Energy Portfolio ETF (PBW). 

A Favorite Service of Mine for News, Downgrades/Upgrades, Rumors

I’ve been using a great service for the past few months that has become an important part of my morning preparation.  The service is Fly On the Wall and they provide alerts to you for news, upgrades/downgrades and rumors.  I have it set up so that these alerts are sent to my inbox and I can check them quickly without having to login to the service.  Several companies that provide a similar service are very expensive, but at $25/month, the Fly On the Wall provides great value in my opinion. 

Barrons reviewed the service in September of last year and had this to say:

"FINDING THE MARKET DATA YOU WANT IS RARELY a problem these days. The hard part is finding a way to grab the information quickly — and without having to wade through a dozen or more Websites. If you’re not already locked into a familiar path, here are three ways to speed up your repetitive tasks.

Get up to speed on breaking news before it breaks: We’ve looked at The Fly on the Wall (www.theflyonthewall.com) numerous times over the years, and it’s become an even more powerful tool. It provides a constant feed of market information: news (analyst recommendations, midday break-ins, trading calls being made to the buy side, etc.); events and presentations; and syndicate (analysis of deals assembled by groups of financial institutions). Designers have spiffed up the site, too, so your viewing experience is easier and more pleasant.

No other site we’ve seen — including Briefing.com (www.briefing.com), one of our favorite market monitors — flies so fast and furiously through rumors and actions that may affect moves.

In most items, a bit of explanatory text is included. The Fly on the Wall has an audio product that runs silently in the background but speaks up when there’s breaking news to be heard; this is included in subscription prices. Subscription rates are $25 a month for Fly News; $25 a month for Fly Syndicate (analyses of deals assembled by groups of financial institutions); and $15 a month for Fly Events. Bundled and annual discounts are available. This long-time site has grown exponentially over the years, and we recommend it highly for any market watcher whose research budget supports it."

I recommend checking it out – I believe they still offer a free trial for 30 days.

www.theflyonthewall.com

Today’s Earnings Movers

Here are today’s notable earnings movers (once again it’s mostly down):
Note: fundamental rank in brackets does not include latest results

UP

  • Coldwater Creek (CWTR) Apparel Stores, fundamental rank [27/30] up 17%, I have Coldwater ranked as one of the top retailers around and after today’s report doesn’t look like its slowing down any – nice gap up breakout to a new all time high
  • HI- Tech Pharma (HITK) Drugs – Generic, fundamental rank [24/30] up 9%, making a move to carve out the right side of a base?

DOWN

  • eDiets.com (DIET) Internet Info Providers, [22/30], down 26%, hope nobody was holding this one through earnings.. it had been carving out a nice base but you can put a fork in this one for awhile
  • Wind River Systems (WIND), Business Software & Services, [24/30], down 21%, this too is done.. all levels of support taken out
  • Bentley Pharma (BNT), Drug Delivery, [24/30], down 13%, still has support of the 200 DMA
  • Casey’s General Stores (CASY), Grocery Stores, [23/30], down 10%, bouncing off the 200 DMA
  • Middleby Corp (MIDD), Diversified Machinery, [25/30], down 8%, after trending higher along the 50DMA for many months it looks like its the end of the road for Middleby
  • Meadow Valley Corp (MVCO), Heavy Construction, [22/30], down 7%, still holding above the 50DMA and has bounced from there.. continues to look OK technically

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