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This week, it was all about earnings, and a lot of the results were disappointing. Even Apple reported a rare miss this quarter.
Just because results didn't meet expectations, however, didn't mean it wasn't a fascinating week in the investing world. Among other things, I learned that Google (Nasdaq: GOOG ) glasses might someday be able to warn me when a person I'm talking to is getting angry. George Jetson never had anything quite as cool as that.
Below are five must-read stories that I stumbled across over the past several days, along with some quick takeaways for investors:
1. Google's mind-blowing future, CNET
In this remarkable piece, Stephen Shankland shows how Google is much more than just a search engine. Instead, it's become "an extension of your mind, an omnipresent digital assistant that figures out what you need and supplies it before you even realize you need it." The author points to automated cars and Google glasses as just a couple of ways that the search giant will become more and more tied to your personal life in the future.
This is exciting but raises some concerns as well. The author notes that Google will know an incredible amount about all of us in the future, and this may raise serious privacy concerns.
Investing takeaway: The privacy concerns are very real and well-stated in this piece. As an investor in Google, however, I couldn't help but be very excited about the future. The move beyond its core search business into a variety of new areas is very exciting and potentially quite profitable.
2. Amazon's valuation, Financial Times (free registration required)
Here, Robert Armstrong and Stuart Kirk provide a deep-dive valuation of online retailing giant Amazon.com (Nasdaq: AMZN ) . The authors do a fantastic job in laying out both bull and bear cases, and provide an interesting comparison with Wal-Mart (NYSE: WMT ) , a retailer that didn't look particularly cheap back in 1991 right before an amazing run of its own.
On one hand, Amazon has delivered average sales growth of 31% over the past decade. On the other hand, it has very low profit margins and faces intense competition in the future. Ultimately, the authors feel that investors should wait for a lower price.
Investing takeaway: Amazon is one of the great investing stories of our time. I've always loved the business but have had some questions about its rich valuation of late. This piece is very good at presenting all of the major considerations for investors.
3. Canada's Warren Buffett likes RIM, The Wall Street Journal
This week, we learned that Prem Watsa of Fairfax Financial (aka the Canadian Warren Buffett) has recently doubled his stake in Research In Motion (Nasdaq: RIMM ) . The news provides a much-needed boost in confidence for the maker of BlackBerry smartphones. The stock has fallen more than 90% since its high point back in 2008.
Investing takeaway: I have great respect for Prem Watsa and can see why this one might be a deep-value opportunity for some investors. But I wouldn't invest in RIM if the Warren Buffett of the United States was buying shares. Research In Motion is a deeply troubled business right now that may struggle to survive over the long term.
4. "So, Is Zynga Finally A Buy At $3?", Business Insider
Business Insider founder Henry Blodget is finally interested in Zynga (Nasdaq: ZNGA ) now that it's fallen by roughly 75% in four months. He actually thinks the stock is trading at a reasonable valuation right now. He does warn, however, that the stock is likely to get even cheaper in the near future. Investors can afford to be patient.
Investing takeaway: My colleague David Meier and I have actually considered Zynga for our real-money, 10-Bagger portfolio. But the recent quarter gave us pause, and the news about insiders cashing out their shares was also a bit unsettling to me. I'm passing on this one for now.
5. "Our Ridiculous Approach to Retirement," The New York Times
The last of our must-reads for this week was a discouraging one for me. Teresa Ghilarducci provided a much-needed wake-up call to Americans of all ages about the sorry state of our retirement planning. She noted that 75% of Americans nearing retirement in 2010 had "less than $30,000 in their retirement accounts." And almost half of all middle-class workers will "be poor or near poor in retirement."
Investing takeaway: Not only can we do better, but we have to do better. This is a complex subject that needs to be talked about by all of us. The one thing everyone can do, however, is start saving and investing today. Here's a helpful free report that will help you get started.
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