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The two industries in comparison will be Technology Stocks and The Oil and Gas Industry which deals in the precious 3 letter commodity - OIL.
1) AAPL (NASDAQ) Inc
The first interesting question to ask me is why do I put AAPL Inc. as an overaching nomenclature of the Technology Stocks. Simple; AAPL is the future and the future is AAPL.
Check out the iPad. It has sold 1 million units in <1 style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 400px; height: 225px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjh58GihELH8JwGLvnWhOo5772Fc1Mi8D4TOwz3zsSnU-y945WvGoV0ge9NSKSA98etaBE1fdkf5fJ-_5NJjyHJxlVq32lBrMr90lKfcDiyiq9-MTp83V-BlTWDWRin8Tsvre42setcKmkk/s400/appleinc.JPG" alt="" id="BLOGGER_PHOTO_ID_5469134908037513442" border="0">Following the general market correction last week (3-7 May), AAPL has corrected 50% as shown in the fibonacci retracements drawn in the chart above. This might be a good place to place entry orders in AAPL.
An online reported recently: "In addition Apple has everything going on for it. They have a strong position, great market share, consumers can’t get enough of their products. They are innovative, trailblazers, and their iPhone continues to grow in popularity. Heck – they even sold 1 million iPads in less than a month for anywhere between $499 and $829 a whack (not to mention the 1.5 million eBooks that were sold from their app store because of the new purchases.)"
What do I see here? Great earnings growth
What does this mean for AAPL? The soaring of stock price. Going back in time, you will realise that AAPL does not have a tendency of paying out dividends in recent years. This means that earnings will be reflected in the increasing share price.
Then should I buy AAPL then?
Yes; if your portfolio is $100,000 and above. 10 AAPL shares is going to cost you anything in excess of $2500. A huge risk to bear in a <$10,000 portfolio.
Let me recommend you another stock which might be a better one to have with a <$10k portfolio.
2) The Oil and Gas Industry. In particular ConocoPhillips (NYSE:COP)
- Soaring Commodity Prices in particular Crude. Winter is coming in 4-5 months. Time to start betting on soaring oil prices.
- Oil spill in Gulf of Mexico. oooppss BP ... Hello other Oil and Gas Stocks
- COP just resolved some bad assets it has previously held when the market tanked in Mar 09.
- 2 quarters of improving earnings and exponential increase in incomes.
- 5% dividends yearly in addition to high possibility of Stock prices increase with the corresponding increase in Commodity prices. Note that Buying Oil Futures is not going to pay you dividends. :)
Take a look at COP charts. An opportunity to enter LONG for COP is presenting itself now after a missed short selling opportunity just the week ago. With dividends to boot, this is a good stock to hold until the end of Winter 2010.So here are the numbers:
50 shares of COP = $2500
Dividends Payout = $100 (approx)
Risk in your portfolio is decreased by a percentage point in a $10k portfolio as compared to buying AAPL.
Market correction presents opportunity to buy stocks at a discounted price. Don't let fear and fear spreading soothsayers cause you to miss the impending market rally.
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