Probably Apple will become the world’s first trillion-dollar company this year

During the dot-com-crazed 1990s, Cisco Systems became the world’s most valuable company. By many it was expected to become the first company to hit a trillion-dollar market value, it made it barely halfway there. When the technology sector peaked in March 2000, Cisco had a capitalisation close to $US550 billion.

From those glory days, the entire technology sector imploded. Cisco fared even worse than the Nasdaq, losing 87 per cent from its zenith to its nadir. Today, some 18 years later, Cisco is worth about $US221 billion ($277.7 billion); its average annual compounded returns from those lofty heights is a negative minus 2.17 per cent per year, including reinvested dividends.

The world, it seems, would have to wait a while for its first true trillion-dollar market capitalisation company.

I was discussing this with a friend earlier this week. Apple is inching toward that trillion-dollar mark (its valuation hovers around $US900 billion). Prior to the recent 12 per cent market swoon, Apple had been trading at an all-time high of $US180.10 per share. As of this week, it eclipsed that, recovering all of that February drawdown.

The trend suggests that sometime this year, Apple will become America’s first trillion-dollar company. What will drive the move to a trillion dollars?

Consider these four factors as key to Apple’s continued upward momentum:

1. Share repurchases: Since 2012, when management first announced its intentions to do big share buybacks, Apple has shrunk its outstanding publicly traded shares considerably. As of 2013, there were 6.6 billion shares available to the public. Today, that count stands at a little over 5.07 billion shares – a 23.2 per cent reduction.

Apple’s board of directors had most recently authorised a $US210 billion share-repurchase program that is expected to be completed by March 2019, according to Apple investor relations. That was before the very corporate friendly 2017 tax reform bill was passed. One would expect that bill will encourage even more share repurchases. We should not be surprised to see a 10 or even 20 per cent share count reduction over the next five years.

What is the effect of reducing share count? It makes the earnings of each share greater proportionately. At the same price, higher earnings equal a lower price-to-earnings ratio, and the company appears cheaper. This could have the impact of enticing value buyers, including…

2. Warren Buffett: The famous value investor has been notoriously tech averse throughout his career. His recent announcement that he is out of IBM and into Apple in a big way surprised a few people.

SANTA MONICA, CA – SEPTEMBER 6: Amazon CEO Jeff Bezos unveils new Kindle reading devices at a press conference on September 6, 2012 in Santa Monica, California. Amazon unveiled the Kindle Paperwhite and the Kindle Fire HD in 7 and 8.9-inch sizes. (Photo by David McNew/Getty Images)

Buffett said Apple is now Berkshire Hathaway’s second biggest holding (after troubled serial fraudster Wells Fargo); Apple was the stock Buffett’s investment firm bought the most of in 2017. Although he claims he still has confidence in Wells Fargo, he cut his stake last year; don’t be surprised to see Berkshire’s Wells holdings get further reduced.

Buffett’s loyal devotees often follow his lead, and are likely to add Apple to their portfolio of value stocks.

3. Index buyers: The past decade has seen indexing go from a modest niche to one of the most popular styles of investing. The explosive gains in assets under management for Vanguard ($US5 trillion) and Blackrock ($US6 trillion) attest to the power of passive investing.

Apple is the biggest company in the Standard & Poor 500, the Nasdaq 100 and the Dow Jones Industrial average — three of the best-known, most-followed indices. As such it captures the flow into index holdings, whenever markets rise. Apple accounts for almost 4 per cent of the S&P 500 (its market cap is about $US23 trillion); 4.9 per cent of the price-weighted Dow; and over a whopping 11 per cent of the Nasdaq 100 ($US7.85 trillion).

4. New products: A slew of new and upgraded products are in the making. These usually direct the next cycle in Apple’s revenue, profits and ultimately price. New services, iPhones, AirPods, wireless chargers, over-the-ear headphones and home devices could be the spark that adds the next $US100 billion in market cap.

I know, there are skeptics. There has been lots of skepticism about Apple for literally decades. The Mac site Daring Fireball has kept a running list of “claim chowder” — all of the bad reviews of iPhones, iPads, Apple Watches, etc. that (incorrectly) forecasted disastrous sales. I see no reason this time is any different.

What factors could derail seeing a huge T in Apple’s market capitalisation? Two quickly to mind:

The market not falling in line: We tend to forget that the overall market and a company’s sector are responsible for about two-thirds of its gains. If tech falls out of favour, or if the overall market rolls over, it will put a trillion dollars out of reach for Apple.

Apple comes in second: The most likely challenger in the race to a trillion would be Jeff Bezos and Amazon.com. It has a market cap of $US732 billion dollars — and an infinitely higher valuation — so it has a tougher road to travel. But I would not put anything past Bezos & Co., and it would not be the first time they saw a 35 per cent gain in a year.

Cisco jinx be damned, I predict a better than 40 per cent chance that Apple’s trillion-dollar valuation will occur this year.2018.

Bloomberg

www.money-au.com

Henry Sapiecha

How the World’s 25 Richest People Arrived at the Top of the Money Tree

In a global economy that roars continuously forward at lightning speed, fortunes can potentially be made and lost in the span of a day. The Bloomberg Billionaires Index is a daily ranking of the world’s 500 richest individuals. While many of the names in the top ten have become as iconic in their own right as the tech companies that propelled them to wealth and fame, there is always room for a few surprises. In addition to their business acumen and accomplishments, many of the men on the list are also active philanthropists. And if the thought of all that wealth feels intimidating and out of reach, consider the fact that the ten richest people on Bloomberg’s billionaire index are all self-made, many with humble and unremarkable beginnings.

Note that the specific rankings change frequently with stock price moves.

1…Jeff Bezos (Total net worth $99.6B)

Jeff Bezos has become synonymous with his company, Amazon, the online book retailer turned global e-commerce juggernaut he founded in Seattle in 1994. Mr. Bezos still runs Amazon, ranked the world’s fourth-largest information technology company by revenue. In addition to retail and tech, Amazon has also ventured into the streaming game, with a number of original shows in development.

When Amazon’s stock price surges up, Bezos edges out Bill Gates and moves into the pole position on Bloomberg’s Index.  When Amazon’s stock eases up, Bezos tends to slip into the second position.

Famous Quote:

There are two kinds of companies, those that work to try to charge more and those that work to charge less. We will be the second.

– Jeff Bezos

Nationality: American

Born: January 12, 1964 (age 53) in Albuquerque, New Mexico, USA

Spouse: MacKenzie Tuttle

Children: 4

2…Bill Gates (Total net worth $89.9B)

It might come as a surprise that Bill Gates, who has dominated “world’s richest” lists for well over a decade and usually tops the index at number one, is currently is second place. But note that he’s neck-and-neck with Jeff Bezos, so depending on the day and the stock market, he still toggles between #1 and #2.

As co-founder of Microsoft, Mr. Gates still holds a 2.4 percent stake in the company, along with a portfolio of diversified assets through a number of publicly traded companies across multiple business sectors, including Canada’s biggest railroad operator. Through the Bill and Melinda Gates Foundation and The Giving Pledge, Mr. Gates has pledged a large portion of his fortune to help solve some of the world’s most pressing public health problems.

Famous Quote:

“The PC has improved the world in just about every area you can think of. Amazing developments in communications, collaboration and efficiencies. New kinds of entertainment and social media. Access to information and the ability to give a voice people who would never have been heard of.”

– Bill Gates

Nationality: American

Born: October 28, 1955 (age 62) in Seattle, Washington, USA

Spouse: Melinda Gates

Children: 3

3…Warren Buffett (Total net worth $83.1B)

Warren “the Oracle of Omaha” Buffett’s origin story is as American as the proverbial apple pie. Known as one of the most successful and prolific investors of all time, Mr. Buffett famously began his professional career as a paperboy and rode an enviable work ethic all the way to the top of the finance world, culminating with his holding company, Berkshire Hathaway. Fun fact: Berkshire Hathaway was originally a textile manufacturer, which eventually came to be the umbrella for 60+ companies under management.

Famous Quote:

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

– Warren Buffett

Nationality: American

Born: August 30, 1930 (age 87), in Omaha, NE, USA

Spouse: Astrid Menks

Children: 3

4…Amancio Ortega (Total net worth $76.2B)

The tech sector may account for the largest slice of the pie, but the third richest billionaire in the world and number one in Europe is the head of retail giant Inditex Ventures, most famous for the Zara fast-fashion clothing chain. A quintessential “rags-to-riches” success story, Amancio Ortega rose from a humble working class background in Spain to run a multinational retail empire, where he continues to work to this day at the age of 80.

Famous Quote:

“In the street, I only want to be recognised by my family, my friends and people I work with.”

– Amancio Ortega

Nationality: Spanish

Born: 28 March 1936 (age 81) in Busdongo de Arbás, León, Spain

Spouse: Flora Pérez Marcote

Children: 3

5…Mark Zuckerberg (Total net worth $73.1B)

Like most of the famous tech entrepreneurs on the list, Mark Zuckerberg needs no introduction. Like Bill Gates, Mark Zuckerberg famously left Harvard early to work on the social network that would come to change the world and influence everything from politics and media to interpersonal communications. As co-founder and current Chairman and CEO of Facebook, Mr. Zuckerberg is the youngest member of the list.

Famous Quote:

“The Hacker Way is an approach to building that involves continuous improvement and iteration. Hackers believe that something can always be better, and that nothing is ever complete.”

– Mark Zuckerberg

Nationality: American

Born: May 14, 1984 (age 33) in White Plains, New York, USA

Spouse: Priscilla Chan

Children: 2

6…Carlos Slim (Total net worth $62.1B)

Best known for his stake in Latin American telecom company America Movil, Carlos Slim also has holdings in a number of international companies across various sectors in Mexico, as well as recognizable American companies like The New York Times and Philip Morris.

Famous Quote:

“The better off you are, the more responsibility you have for helping others. Just as it’s important to run companies well, with a close eye to the bottom line, you have to use your entrepreneurial experience to make corporate philanthropy effective.”

– Carlos Slim

Nationality: Mexican

Born: January 28, 1940 (age 77) in Mexico City, Mexico

Spouse: Soumaya Domit

Children: 5

7…Bernard Arnault (Total net worth $61.6B)

The other European on the list also made his fortune in the retail sector. As chairman of LVMH Moet Hennessy Louis Vuitton, Bernard Arnault controls the world’s biggest luxury goods house, which in addition to the beloved Louis Vuitton brand also includes high profile brands like Tag Heuer and Dom Perignon champagne.

Famous Quote:

“If you deeply appreciate and love what creative people do and how they think, which is usually in unpredictable and irrational ways, then you can start to understand them. And finally, you can see inside their minds and DNA.”

– Bernard Arnault

Nationality: French

Born: 5 March 1949 (age 68) in Roubaix, France

Spouse: Hélène Mercier

Children: 5

8…Larry Ellison (Total net worth $54.4B)

Larry Ellison made his name (and fortune) as the founder of legendary database company Oracle. While his roughly 25 percent stake in Oracle may account for a large portion of his wealth, Mr. Ellison also holds a diversified portfolio with investments across a number of industries, namely real estate and professional sports (including a sailing team and the tennis tournament at Indian Wells in California).

Famous Quote:

“There’s a wonderful saying that’s dead wrong. ‘Why did you climb the mountain?’ ‘I climbed the mountain because it was there.’ That’s utter nonsense…You climbed the mountain because you were there, and you were curious if you could do it. You wondered what it would be like.”

– Larry Ellison

Nationality: American

Born: August 17, 1944 (age 73) in Manhattan, New York, U.S.

Spouse: NA (multiple divorces)

Children: 2

9…Larry Page (Total net worth $51.5B)

With his partner Sergey Brin (no. 10), Larry Page claimed his place in history and helped to change the world as the co-founder of Google. As CEO of Google’s holding company (Alphabet), Larry Page controls the world’s largest search engine operator.

Famous Quote:

“For a lot of companies, it’s useful for them to feel like they have an obvious competitor and to rally around that. I personally believe it’s better to shoot higher. You don’t want to be looking at your competitors. You want to be looking at what’s possible and how to make the world better”

– Larry Page

Nationality: American

Born: March 26, 1973 (age 44) in East Lansing, Michigan, USA

Spouse: Lucinda Page

Children: 2

10…Ingvar Kamprad (Total net worth $50.6B)

Claim to Fame: He’s the founder of IKEA, a Swedish retail company specialising in furniture.

Famous Quote:

“Happiness is not reaching your goal. Happiness is being on the way.”

– Ingvar Kamprad

Nationality: Swedish

Born: March 30, 1926 (age 91) in Pjätteryd, Sweden

Spouse: Kerstin Wadling

Children: 4

11…Sergey Brin (Total net worth $50.2B)

As co-founder of Google, Sergey Brin is a member of the elite group of tech titans that got their start in a San Francisco area garage. President of Alphabet, Mr. Brin has also had a hand in Google’s innovative offshoot Google X, where the company’s many geniuses are hard at work on various “moon shots,” working to find solutions to some of the world’s most pressing problems. In addition to his role in inventions like Google Glass, Sergey Brin went a little off-brand in 2007 to executive produce the movie “Broken Arrow” with his co-founder Larry Page.

Famous Quote:

“Obviously, everyone wants to be successful, but I want to be looked back on as very innovative, very trusted and ethical and ultimately making a big difference in the world.”

– Sergey Brin

Nationality: American (Soviet until 1979)

Born: August 21, 1973 (age 44) in Moscow, Soviet Union

Spouse: Anne Wojcicki

Children: 2

12…David H. Koch (Total net worth $47.8B)

Claim to Fame: He and his brother Charles are major donors to political advocacy groups and campaigns, almost entirely Republican.

Famous Quote:

“I’m basically a libertarian, and I’m a conservative on economic matters, and I’m a social liberal.”

– David Koch

Nationality: American

Born: May 3, 1940 (age 77) in Wichita, Kansas.

Spouse: Julia Flesher

Children: 3

13…Charles Koch (Total net worth $47.8B)

Claim to Fame: He and his brother David are major donors to political advocacy groups and campaigns, almost entirely Republican.

Famous Quote:

“The role of business in society is to help people improve their lives by providing products and services they value more highly than their alternatives, and to do so while consuming fewer resources.”

– Charles Koch

Nationality: American

Born: November 1, 1935 (age 82) in Wichita, Kansas.

Spouse: Liz Koch

Children: 2


14…S. Rob Walton (Total net worth $46.2B)

Claim to Fame: Rob served as Chairman of Walmart from 1992 to 2015.

Famous Quote:

“I learned from my dad that change and experimentation are constants and important. You have to keep trying new things.”

– Rob Walton

Nationality: American

Born: October 28, 1944 (age 73) in Tulsa, Oklahoma.

Spouse: Carolyn Funk (divorced)

Children: 3

15…Jack Ma (Total net worth $46.2B)

Claim to Fame: Jack is the founder and executive chairman of Alibaba Group.

Famous Quote:

“I don’t want to be liked. I want to be respected.”

– Jack Ma

Nationality: Chinese

Born: September 10, 1964 (age 53) in Hangzhou, Zhejiang, China.

Spouse: Cathy Zh?ng Y?ng

Children: 2

16…Jim Walton (Total net worth $45.6B)

Claim to Fame: Jim is the youngest son of Sam Walton, the founder of the world’s largest retailer, Walmart.

Nationality: American

Born: June 7, 1948 (age 69) in Newport, Arkansas.

Spouse: Lynne McNabb

Children: 4

17…Alice Walton (Total net worth $44.9B)

Claim to Fame: Alice is the wealthiest woman in the world!  She is the daughter of Wal-Mart founder Sam Walton.

Famous Quote:

“One of the great responsibilities that I have is to manage my assets wisely, so that they create value.”

– Alice Walton

Nationality: American

Born: October 7, 1949 (age 68) in Newport, Arkansas

Spouse: Divorced

18…Francoise Bettencourt Meyers (Total net worth $44.3B)

Claim to Fame: Francoise is a board member of L’Oréal

Nationality: French

Born: June 7, 1948 (age 69) in Newport, Arkansas.

Spouse: Jean-Pierre Meyers

Children: 2

19…Pony Ma (Total net worth $40.2B)

Claim to Fame: Pony Ma is the founder, chairman and CEO of Tencent.

Famous Quote:

“The leader of the market today may not necessarily be the leader tomorrow. ”

– Pony Ma

Nationality: Chinese

Born: October 29, 1971 (age 46) in Chaoyang District, Shantou, Guangdong, China.

20…Mukesh Ambani (Total net worth $39.8B)

Claim to Fame: Mukesh refines petrochemicals.  He also owns the Indian Premier League franchise the Mumbai Indians.

Famous Quote:

“It is important to achieve our goals, but not at any cost.”

– Mukesh Ambani

Nationality: Indian

Born: April 19, 1957 (age 60) in Aden, Colony of Aden

Spouse: Nita Ambani

Children: 3

21…Sheldon Adelson (Total net worth $35.5B)

Claim to Fame: Sheldon is the founder, chairman and chief executive officer of Las Vegas Sands Corporation.

Famous Quote:

“Achievement is the motivation of entrepreneurs.”

– Sheldon Adelson

Nationality: American

Born: August 4, 1933 (age 84) in Boston, Massachusetts.

Spouse: Miriam Ochsorn

Children: 5

22…Hui Ka Yan (Total net worth $34.5B)

Claim to Fame: Hui Ka Yan is the Founder and Chairman of the Evergrande Real Estate Group

Nationality: Chinese

Born: 1958 in Taikang County, Zhoukou, Henan, China.

Children: 2

23…Steve Balmer (Total net worth $34.2B)

Claim to Fame: Steve was the CEO of Microsoft from 2000 to 2014, and is now the owner of the Los Angeles Clippers basketball team.

Famous Quote:

“I loved every minute of my time at Microsoft, but I had always envisioned having another phase of life just because I thought that would be interesting. It had never been my plan to work until I literally didn’t want to do anything and then hang it up.”

– Steve Balmer

Nationality: American

Born: March 24, 1956 (age 61) in Detroit, Michigan.

Spouse: Connie Snyder

Children: 3

24…Li Ka-Shing (Total net worth $33.7B)

Claim to Fame: He’s now one of Asia’s most generous philanthropists.

Nationality: Chinese

Born: July 29, 1928 (age 89) in Chaozhou, Guangdong, China.

Spouse: Chong Yuet Ming

Children: 2

25…Jacqueline Mars (Total net worth $33.4B)

Claim to Fame: Heiress and granddaughter of the founder of the American candy company Mars, Incorporated.

Nationality: American

Born: October 10, 1939 (age 78)

Children: 3

Henry Sapiecha

 

The Side Hustle Economy: 25 Ways to Make Extra Money on the side

Popularized in recent years by people like Gary Vaynerchuk, the “side hustle” has quickly become a preferred mentality for aspiring entrepreneurs to make additional money on the side.

The gist of it is: by working hard outside the traditional hours of a 9-to-5, a side hustle allows you to build a business around what you are truly passionate about. And if that endeavor is successful, it can also help you make the full transition into permanent entrepreneurship later on.

Enter the Side Hustle Economy

Today’s practical infographic from Quid Corner highlights 25 different ways to dip your toes into the side hustle economy.

Some of these side hustles, like building courses or writing eBooks on your area of expertise, are great ways to begin building your personal thought leadership brand.

Meanwhile, other hustles listed here are more appropriate for supplementing your regular income. Getting extra cash in your pocket – and on your own terms – can help give you the confidence to start a business, or invest in further education.

Going From 0 to 60

If you are ready to make the dive into entrepreneurship, we previously posted 5 Ideas for Online Businesses in 2017.

If you’re still just getting your feet wet, it’s side hustle time. Work on the side for additional capital, get a proof-of-concept for your idea, or find ways to build your personal brand.

Even if your ambitions are huge, start slow, start small, build gradually, build smart.

– Gary Vaynerchuk, Serial Entrepreneur

Side hustling allows you to get a start while still having two feet on the ground. However, that’s not to say that side hustling is easy – it takes lot of work and commitment, and you have to be prepared to spend evenings and weekends to pursue your passion, with no guarantee for immediate results.

Here’s a few other infographic resources to help you get started or motivated:

Good luck out there.

www.money-au.com

Henry Sapiecha

TEN TOP RICHEST COMPANIES IN THE WORLD SHOWN IN THIS GRAPH

Top 10 Richest Companies in World

This chart shows the Top 10 Richest Companies in World.

A company is an association or collection of individuals, whether natural persons, legal persons, or a mixture of both. Company members share a common purpose and unite in order to focus their various talents and organize their collectively available skills or resources to achieve specific, declared goals.

Companies take various forms such as:

   1.Voluntary associations which may include nonprofit organization.

 2.A group of soldiers.

 3.Business entities with an aim of gaining a profit.

   4.Financial entities and banks.

Rank
Company
Networth in Billion
Corporation
Headquarters
1 Exxon 486.429 Multinational Oil and Gas corporation Irving, Texas,US
2 Welmart 446.9 Multinational Retail corporation Bentonville,Arkansas,US
3 Chevron 253.706 Multinational Energy corporation San Ramon,California
4 Toyota 236 Motor Corporation Toyota,Aichi,Japan
5 Apple 185 Multinational Technology Company California
6 General Electric 147.3 Multinational conglomerate corpporation Fairfield,Connecticut,US
7 Berkshire Hathaway 143.688 Multinational conglomerate holding corpporation Omaha,Nebraska,US
8 AT & T 126.723 Multinational telecommunication corporation Dallas,Texas,US
9 IBM 112.5 International Business Machines Corporation Armonk,New York,US
10 Procter and Gamble 82.55 Multinational consumer goods company Cincinnati,Ohio,US

OOO

Henry Sapiecha