E-Readers go to the Library
Stock Market Analysis Video
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A few weeks ago, I mentioned how much I love watching Antiques Roadshow. In the episode I saw this week, a man brought an 1880s era stock ticker to be appraised and it really piqued my interest. So I decided to do some research and found:
Edward A. Calahan invented the stock ticker in 1867 to convey stock prices over a long distance. A special typewriter was used to send the stock quotes over telegraph wire that then displayed them on the stock ticker at the other end of the connection. A bit different from the way we can view a stock’s movements second by second on Yahoo! or Google Finance today.
Thomas Edison made improvements on the device and his Universal Stock Ticker was said to have a printing speed of one character per second in the late 1860s.
In the 1870s, stock tickers were available on a contract basis for about $6 per week. And by 1883, 1,000 were in use around New York City.
The stock ticker I saw on Antiques Roadshow was made between 1880-1885 by the Star Electric Company. The appraiser said it was worth about $8,000 to $10,000—not bad for a piece of obsolete (if still very cool) technology.
As I discussed in last Saturday’s issue, we’ll be addressing many of the questions you asked and topics you requested in our recent survey over the next few weeks and months. One thing that came up repeatedly was revisiting topics we’ve discussed before and providing updates on past recommendations. So today, I’m going to discuss a topic I’ve written about in the past … e-readers.
I wrote a column a little over a year ago detailing what I thought were the problems with many e-readers and some possible solutions.
Many of the problems that I saw with e-readers a year ago still exist: once you buy an e-reader, you’re locked into that technology and so are the books you’ve purchased; it’s difficult to share books on e-readers; you don’t really “own” the books in a long-term way because you can’t display them on your shelves or pass them along to future generations; and of course, the cost of an e-reader can be substantial, especially if you upgrade when new models come out.
But one major hurdle has been surmounted: You can now check library books out on certain e-readers. It was announced just this week that users of Apple’s (AAPL) iPad and Google’s (GOOG) Android tablets would have the ability to check out e-books from their local libraries.
Sony’s Reader and Barnes & Noble’s Nook have had this ability for a while, but you need a PC and USB cord to download the books, whereas the new service, from OverDrive Inc., allows users to download the books through an application right on the device. Amazon’s (AMZN) Kindle does not yet have this capability.
I read a lot (98 books in the last 23 months!), so constantly buying books is not something I want to do. Instead, I get a lot of books from my local library, which is connected to 40 others, so it has a great selection. And knowing that I could access them on an e-reader would definitely entice me to think about purchasing one.
The library e-books will be free, just like the regular books you check out there. You’ll keep them for between seven and 21 days, about the same as a normal book. And some libraries are even going to allow patrons to set their own due dates.
The major problem I see with this new system though is that there are only a certain number of copies of the books, as the libraries are paying fees to license them, just as they buy the regular books that they lend. So this means that if all the copies of the book you want to read are checked out, you have to wait until it comes available before getting started. This makes sense from the licensing perspective, but it seems backward that there would be limited copies of a piece of digital media.
So while there are now e-books available for free, the system still isn’t perfect. But knowing that I can still use my local library with certain e-readers definitely makes me more inclined to purchase one that is compatible.
When I wrote about again e-readers last fall I discussed Amazon and Apple. Today, I’m going to revisit those recommendations. Both stocks have climbed higher since then, with AMZN moving from 160 to 189 and AAPL going from 307 to 340.
However, the market has recently begun to pull back, which is a normal, healthy reaction to the incredible run-up we’ve seen in the past few months. So while I think both of these stocks have a lot of future upside potential, this may not be the best time to buy.
If I had to pick one stock between these two, I’d pick Apple. Its recent earnings reports have been much stronger than Amazon’s and I think the company has a lot more innovative technology up its sleeve. And Michael Cintolo has been recommending Apple to Cabot Top Ten Weekly subscribers since early June 2010 and continues to feature it in the newsletter, meaning that it’s one of the strongest stocks in the market.
That’s not to say that Amazon won’t succeed. Its recent announcement that it will try to compete with Netflix by offering Amazon Prime members online movie subscriptions will undoubtedly help it going forward.
As I mentioned, the market is due to correct, so you should watch these stocks first before diving in. Or better yet, get Mike’s latest thoughts on AAPL and other leading stocks in Cabot Top Ten Weekly.
In this week’s Stock Market Analysis Video, Cabot Market Letter Editor Michael Cintolo discusses the market’s sharp shakeout this week, which could be the first sign of a coming correction. Mike says the market has been in a persistent uptrend since September 1, so now you should look to sell your losers and buy only those stocks that are holding up well. Mike discussed Acme Packet (AKPT), Riverbed Technology (RVBD), Weight Watchers (WTW), Manitowoc (MTW), Fortinet (FTNT) and Priceline.com (PCLN). Watch the video.
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In case you didn't get a chance to read all the issues of Cabot Wealth Advisory this week and want to catch up on any investing and stock tips you might have missed, there are links below to each issue.
Cabot Wealth Advisory 2/21/11 – Obama’s Clean Energy Apollo Program
On Monday, Brendan Coffey discussed President Obama’s declaration that 80% of U.S. energy comes from clean sources by 2035. Brendan discussed how the push toward using alternative energy has helped boost Green stocks. Brendan also discussed a growing fuel cell company. Featured stock: FuelCell Energy (FCEL).
Cabot Wealth Advisory 2/22/11 – 5 Things Every Income Investor Needs to Know Now
On Tuesday, we heard from StreetAuthority’s Carla Pasternak as she discussed the effect baby boomers could have on income investments and five criteria that can help income investors discover the best investments in that area.
Cabot Wealth Advisory 2/24/11 – The Wealth Gap
On Thursday, Paul Goodwin discussed the wealth gap in the U.S. and China and what it means for both countries, which have very different economic and political systems. Paul also discussed a way to play the potential correction in Chinese stocks. Featured stock: Direxion Daily China Bear 3X Shares (CZI).
Until next time,
Editor of Cabot Wealth Advisory