IBM bets on a “ hybrid cloud ”

The motley madman takes

Are you looking for a stock with high growth potential and a big dividend? Take the example of international office machines, with a dividend of over 4.5% recently.

IBM’s old lines of business struggled for years, and this kept the stock depressed. But it is abandoning its managed infrastructure business by the end of this year. This will allow the new entity to focus more on what it describes as “the $ 1 trillion hybrid cloud opportunity”.

While IBM offers a public cloud platform similar to market leaders Amazon Web Services and Microsoft Azure, it focuses on hybrid cloud computing instead. IBM is betting that its large customer base will benefit from the combination of on-premises hardware and public cloud services instead of just going all-in-one on a public cloud.

IBM’s total cloud revenue grew 19% in 2020 to $ 25.1 billion. In the first quarter of 2021, the century-old tech giant returned to full revenue growth and beat analyst estimates for both top and bottom results. The company is also in the process of paying off substantial debt and it has a strong balance sheet, with more than $ 10 billion in cash.

It’s time to start thinking about IBM as a leader in emerging technology trends like hybrid cloud computing (as a partner to help organizations get the most out of their data) and artificial intelligence (as a developer). AI applications).

Ask the fool

From JC to Victoria: Is it better to invest only in profitable businesses, avoiding those that lose money?

The madman replies: Not necessarily. Many large businesses start to lose money as they become established. You need to be sure that he has a path to profitability and is likely to achieve it. In their early years, some companies spend more than they earn on marketing campaigns, recruiting top talent or expanding their reach in order to compete and gain market share.

Amazon is a perfect example. Even when he was very successful, he recorded years of losses due to large expenses. But it was clear that it could become profitable simply by limiting expenses and increasing prices. It is therefore not necessary to completely avoid unprofitable businesses; don’t put all your money in it. There are always many profitable companies that you can invest in.

From CM, Janesville, Wisconsin: How to use stop orders?

The madman replies: You can use them to buy or sell stocks at or near specified prices. Many people place stop orders with their brokerage firms to avoid losing a lot of money if a holding suddenly dips.

You can place an order to sell a stock if it drops by, say, 15% of its current price (to a certain price per share). This is tricky, however, as many large, long-term investments could temporarily drop 20% or more, before finally recovering and reaching new highs. So, it’s best not to set your stop order too conservatively – or just not to use a stop at all, at least for the sale.

Long-term investors who hope to stay invested in high-potential stocks for years to come should simply expect volatility and weather temporary downturns.

Madman’s school

The more you know about scams, the easier it is to avoid them. Here are the common traits of scams to watch out for:

It’s personal: Some scammers pose as a friend or family member who has an emergency and needs money.

Someone is requesting a bank transfer: A scammer may ask you to transfer money out of the blue, perhaps through a company such as Western Union. Once you’ve wired the money, it’s gone and you probably won’t be able to get it back.

You are seduced by money: If an email, text, or phone call suggests that you can raise a lot of money by taking trivial actions, that’s a red flag.

You are asked to be an intermediary: Don’t be fooled by a request to process and transfer money between other parties.

He claims to be official: Many scammers will call you, text or email you pretending to be a government entity or financial institution in an attempt to get your personal information or payment from you. Their emails can sound compelling and their messages can be compelling. Pay attention. Find the organization and contact it through official channels; don’t click any links or call a phone number that a potential scammer has given you (or give money or information to a caller).

It’s urgent: If you are told that you need to act very quickly, you are probably being manipulated into acting recklessly, out of emotion.

He plays on fear: Some scammers will try to scare you into taking action, suggesting, for example, that you could lose your Social Security benefits – or even your job – if you don’t make a certain payment or don’t disclose your payment. ‘personal informations.

The bottom line is, if something sounds too good to be true, it probably is. And if that sounds a bit too odd, like asking you to make a payment before receiving a raffle prize, that’s a red flag too.

My smartest investment

From DD, online: One of my silliest investments – buying shares of Exelixis – was also one of my smartest investments. It went down 80% at one point (when I bought more) and then about 300%. Know your businesses.

The madman replies: Biotech stock Exelixis fell sharply at the end of 2000 as the dot-com bubble burst, causing the market to fall overall. A lot of people simply sold a lot of their stocks during the stock market crash, which caused stock prices to fall. But at such a time, it makes sense to question any stake that has fallen: has it really become a less promising proposition, or is it just facing a temporary setback? Big market crashes destroy big business as well as poor people, so don’t be in a hurry to sell.

You were smart to hang on – and, indeed, you bought even more stocks. It can be a powerful gesture if you have confidence in the future of the business. (This is also a difficult decision to make, when it appears that few investors have confidence in the company – as surely was the case with an 80% drop.) You’re right that it is imperative that you fully understand your holdings, so that you can act appropriately.

The future of Exelixis still looks bright: its successful drug Cabometyx (already approved to treat kidney and liver cancer) could be approved for other treatments, and its sales may also grow internationally.

Who am I?

I trace my roots to the Hudson River Valley in New York City in 1936, when a man bought a depleted iron mine and 100 acres to grow mushrooms. After World War II, aware of the need to protect vital documents from destruction, he used his iron mine to launch me in 1951. Today, based in Boston, I am a world leader in storage and information management, serving more than 225,000 organizations. My 1,450 facilities in 56 countries span over 90 million square feet, storing and protecting data, archives, works of art, historical artifacts and more. I raise over $ 4 billion a year. Who am I?

Can’t remember the question from last week? Find it here.

Response from trivia from last week: King Arthur Baking Co.

About Scott Conley

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