Facebook's Ad Sales, Google's Smartphone White Flag, and Taper's Round 2

Good morning, good lookin'. Here are the three things you need to know on Jan. 30.

Jan 30, 2014 at 6:00AM
Someone get us a Costco-sized grinder of this maple bacon coffee flavored beer after another big drop on Wall Street. The Dow Jones Industrial Average (DJINDICES:^DJI) toppled 190 points Wednesday after a big, bad announcement from the Federal Reserve.

1. Fed continues its taper in Bernanke's last meeting
That's a wrap. The Fed's epic eight-times-per-year, two-day policy meeting/vacation retreat ended Wednesday. Chairman Ben Bernanke didn't hand out a rose like on The Bachelor (though it would make the central bank more fun), but he did announce more stimulus cuts that rocked Wall Street.
Throughout 2013 the Fed supported the U.S. recovery through "quantitative easing" (aka QE3) -- it bought $85 billion in long-term bonds every month, which drove down interest rates to encourage borrowing and risk-taking to help the U.S. economy.
But starting in December, the Fed decided to cut back on its stimulus protein shake. As econ data over the past year continues to show the U.S. economy improving, the Fed cut its monthly QE3 purchase to $75 billion, and on Wednesday it chopped the amount down again to $65 billion. The Fed did say that quantitative easing of some size will remain until unemployment dips closer to 6.5%, but stimulus-hooked investors weren't craving the news.
The takeaway is that Big Bernanke's last meeting almost made us tear up -- 'cause it was his last. The legend leading the Fed has been at the helm since '06 but will step away on Feb. 1 as Janet Yellen steps in. She's expected to keep stimulus flowin', but we'll miss the beard jokes, Ben.

2. Facebook shows off impressive mobile-driven earnings
's (NASDAQ:FB) alarming user growth rate (warning: Grandma's cat video is on your news feed) has come to an end. New users grew only 3% from the prior quarter. The good news is that it's matured into a profit power. Sales climbed 63% to $2.3 billion in the fourth quarter, and earnings totaled $523 million. Both crushed Wall Street estimates.

Mobile advertising is climbing as a percentage of total revenues at 53% in the fourth quarter, up from 23% a year ago. It's important, since 77% of users are doing it on their phones. Clearly, Mark Zuckerberg is learning how to occupy smartphone users with annoying Wal-Mart ads on their walls, which is a huge plus for FB shareholders.

Facebook knows you better than your mom does, and they're cashing in on the ad dollars. Because of all-encompassing user-data, FB targets a demographic with razorlike precision, so it's charging top dollar for its ad space. Companies are paying 29% more per FB ad than last year.

It's still growing, too. Facebook's employee headcount grew 33% last year and is poised to grow more in 2014. Look out, Silicon Valley. More Adidas sandals and zip-up hoodies are coming your way. The stock is up 10% on the awesome news.

3. Google sells Motorola phone unit to Lenovo
Do you have a hardware business that stinks? Lenovo is probably willing to buy it off you. The Chinese tech company is binging on American underperforming tech segments. First Lenovo bought IBM's laptops in 2005, then its servers last week, and Wednesday it announced it was buying Google's Motorola phone division for $2.9 billion.

Google makes phones? Yes. You might not have noticed that your Motorola Droid is made by Google (NASDAQ:GOOGL), and it has been ever since Big G bought the phone company for $12.5 billion in May 2012. It's selling today because it's a viciously competitive business to make smartphones. And it was ticking off Samsung, too.

Android OS is owned by Google, and it's what most Samsung smartphones run on. The fact that Larry Page's enormous company had its own pet-phone company irritated the biggest phonemaker in the world, Samsung. Maybe this sale gets Google out of Samsung's doghouse.

Motorola was a $9.6 billion loss for Google, according to my Gcalc app. It wasn't a total failure, since it got to gobble up some lawsuit-preventing patents from Motorola's intellectual-property arsenal, but this is a high-profile defeat for GOOG ... and another chapter of Lenovo's journey into American AV clubs.   
  • U.S. GDP reading 
  • Weekly jobless claims
  • Earnings: Amazon.com, Google, UPS
As originally published on MarketSnacks.com

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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