Crumbs Crumbles, and Apple Poaches a VP

The four things you need to know on July 14 are:

Jul 14, 2014 at 9:01AM

Go ahead and treat yourself to a midsummer shandy. After stocks dropped big last week on some out-of-the-blue European bank fears, you deserve it.

The stock market winners...
If you're a big fan of the iCulture, then you're probably bored of your iPhone already and ready to move on to the next big iThing. Well then does Apple CEO Tim Cook have big news for you. Shares of Apple (NASDAQ:AAPL) rose last week on word that Apple is more aggressively pursuing an iWatch thanks to some key recent hires.

That's right -- the company confirmed rumors last week that it had snatched up Patrick Pruniaux from the time-keeping brand Tag Heuer. Pruniaux was the high-up VP of sales and retail at Tag, which happens to be owned by the luxury goods firm LVMH. Although Pruniaux is expected to lead the roll-out of the smartwatch initiative in Apple land, it's not known yet what his exact role will be.

Right under your nose, Apple has been slowly building up its iWatch go-to A-team in 2014. Cupertino also hired the former CEO of Burberry to add some glam to the company's retail locations. It's no wonder research firm Pacific Crest raised its price targets on Apple stock this week. And soon you may be able to read about news like that on your iWatch.

...and stock market loser
Even if you don't have a sweet tooth, it would be hard to miss the most sugar-fueled story on Wall Street this past week -- the crumbling of the Crumbs Cupcake empire. While the dessert chain's stock was officially delisted from Nasdaq the previous week as its share price dropped to pennies, the company officially closed all its retail locations on Tuesday. Now its focus turns to potential bankruptcy measures.

So what was the problem? A few things -- cupcakes aren't a proprietary product (anyone can make them), the company didn't offer enough additional items (like muffins or fruit), and most of all, all trends must come to an end (just think of bell bottoms or anything else your parents used to wear).

The major business-related driver of Crumbs' demise was overexpansion, similar to what ate up Krispy Kreme just 10 years ago. Just a month after its June 2011 IPO, sales at Crumbs had fallen 6% and the CEO soon resigned, yet the company continued to aggressively expand beyond 50 stores in 10 states despite the slowing demand. The result? Just last year, Crumbs posted a $20 million loss and hasn't recovered since.

Alcoa kicked off the earnings season strong
Not only is it summer grillin' season, it's now officially corporate earnings season. Just like every quarter, aluminum-mining giant Alcoa (NYSE: AA) kicked things off with an impressive $138 million in profits (after a major loss in the first quarter), thanks to its recent cost-cutting binge. This week is all about bank earnings, which began Friday when Wells Fargo (NYSE: WFC) announced a nearly 4% gain in profits despite lower revenue.

The Fed made a big stimulus announcement
How do you get through the brutal Washington, D.C., summer humidity? With juicy details about the Federal Reserve's stimulus plans. The Fed released details from its June policy setting meeting that revealed the central bank plans to end its "quantitative easing" stimulus measures (long-term bond purchases to keep interest rates low, encouraging borrowing) as early as October. Although Wall Street loves it some stimulus, the news was expected.

As originally published

Warren Buffett: This new technology is a "real threat"
At the recent Berkshire Hathaway annual meeting, Warren Buffett admitted this emerging technology is threatening his biggest cash-cow. While Buffett shakes in his billionaire-boots, only a few investors are embracing this new market which experts say will be worth over $2 trillion. Find out how you can cash in on this technology before the crowd catches on, by jumping onto one company that could get you the biggest piece of the action. Click here to access a FREE investor alert on the company we're calling the "brains behind" the technology.

MarketSnacks has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

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."

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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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