Risk vs. Reward

When you think about a "safe investment" frequently you think about so-called "blue chip" stocks. While the symbols may change the results are the same: growth that will moderately exceed past the average. Below are some excellent blue chips for the 21st century along with some target goals. Blue Chippers are almost always well established companies with very solid earning and new income stream potential. That stability and consistency allows the company to pay dividends frequently.

Google: They raise their target to $670 from $620, and raise estimates. They lift their 2007 EPS estimate to $15.83 from $15.70; 2008 goes to $22.21 from $21.95. The analysts cite accelerating U.S. search query growth, continued monetization improvements, strong international growth, few signs of slowdown in online financial services advertising spending and a positive currency tailwind.
Amazon: Price target to $105 from $90. EPS for 2007 up to $1.14 from $1.12, and for 2008 to $1.91 from $1.90. The analysts cite traffic acceleration in the third quarter, strong growth in high margin third party merchandise sales, and rising customer loyalty from the Amazon Prime program and free shipping. The also says that prior technology and content spending will bear fruit in 2008 and beyond. They do see some bumps ahead, however, including Q3 margins on the last Harry Potter book, tougher comps in Q4 and the loss Borders revenue in the 2008 first quarter.
eBay: Price target to $44 from $43; 2007 EPS to $1.13 from $1.10; maintain 2008 at $1.53. They say that “core listings have stabilized,” and that ASPs continue to grow in high single digits while conversion rate have improved from “core-store rebalance.” They raise third quarter revenue estimate to $1.864 billion from $1.815 billion, but says that a “3Q beat” is already priced into the stock.

Today:
Google is up $6.71, or 1.1%, to $616.33.
eBay is up 17 cents, or 0.5% to $38.33.
Amazon is off 85 cents, or 0.9%, at $95.


High Returns

Any smart investor is always balancing safety with return potential. the problem has always been the higher the risk the higher the reward. What a wise advisor can do is help explain and calculate the difference between preceived risk and actual risk. I am very sure that very few people realized that risk associated with investing in ENRON.

For the savvy investor looking for high growth, the goal is always to be on the front-end of the next trend. Right now if you looking for the next trend look towards Africa. The Nigerian stock exchange is up over 100% for the year. However, all we ever hear about Nigeria are the negatives.

The other good thing about investing is emerging markets is that you are doing your part to help those who are less fortunate. Dont sent money to some NGO, send money to an employer. From a particle point: had you invested $1,000 in Congo Telcom 5 years ago, today you would have $1,000,000. Lets see AT&T match that.

From 1999 through 2004, the number of mobile subscribers in Africa jumped to 76.8 million, from 7.5 million, an average annual increase of 58 percent. South Africa, the continent's richest nation, accounted for one-fifth of that growth. Asia, the next fastest-expanding market, grew by an annual average of 34 percent in that period.