Amazon, Apple and the Process of Evolution

New technology is often associated with disruption that changes the status quo. Sometimes the change is lethal for established industries, other times it plays the role of resurrection.

Apple disrupted RIM and Nokia by building and marketing products that work and look good. They figured out that they don’t just sell iPhones, they sell experience. This is why they build stores. They realized that they don’t just sell iPads, they sell distribution channels. Apple gets a cut of everything sold through its devices. Smart.

Some can make the argument that Amazon is putting out of business brick and mortar retailers. Amazon is not the reason. The reason is in the stores themselves. Provide the experience and the sexy products that Apple offers and people will come. Amazon is merely the reason for cheaper commercial real estate, which hurts REITS and homebuilders, but also provides better rates for smart retailers.

In the meantime, new technology is actually saving old industries.

E-tailing and Amazon are saving the paper industry. Just when we thought that paper has become a thing of the distant past, people adopted new habits of buying online and the demand for packaging paper skyrocketed. E-tailling is helping the distribution and logistics business too, but this was expected.

Social media, in the face of Twitter, Facebook and now Google+ has offered second life to newspapers and magazines by providing new distribution channels for the consumption of their products. People read more and watch more videos in new, more convenient ways. More views equal higher advertising revenue.

Netflix, Hulu, Amazon Video Store, Apple and Google TV are saving the video content providers. Look at the charts of $CBS and $DIS. There has always been a demand for great content. The new media, the new technology has just offered an alternative way to consume it.

It is said that the best companies build their own industries. $AAPL and $AMZN are two typical examples. Both went from zeros to heroes in 12 short years, disrupting everything and everyone. Both are trading at new all-time highs after blowing off the estimates in their most recent earnings reports. Often there is a difference between a great company and a great stock. $AAPL and $AMZN have been the exception, so far.

Guns, Gold and Swiss Francs at the All-Time High List

Other than the usual suspects $AAPL and $BIDU (which just crushed earnings estimates again), the all-time high list is populated with some interesting names.

The Swiss cows have become 30% more expensive than the American cows over the past 2 years. There are rumors that the Swiss marmots want to retire and receive their pensions in the U.S.

$GLD keeps surging as debt ceiling talks in U.S. have turned into a soap opera. Sometimes pictures are stronger than words. See a quarterly chart of $GLD since its inception.

$RGR is not technically at all-time high, but 15-year high has similar meaning from psychological perspective.

With guns, gold and the Swiss Franc at record levels, the market doesn’t really provide a vote of confidence in the world economy. Thankfully, the stock market and the economy can go in separate directions for an extended period of time and renting stocks is not illegal.

3 Chemical Stocks on the All-Time High List

It is always worth to pay attention when several stocks from the same industry are on the all-time high list. In this case, I am referring to chemicals and more specifically $CE, $FMC and $TPCG.

TPC Group ($TPCG) has the smallest market cap out of the three: a bit more than $700M. 15.6M shares in the float, 4% out of which are currently shorted.

The company destroyed analysts’ consensus estimates in May, reporting an EPS of $0.70 vs expectations for $0.35.$TPCG gapped 20% on the next day, only to give back its entire gain in the following few days. Nevertheless, it managed to hold above its rising 50-day MA and form a solid base above it.

Next Earnings report is scheduled for August 10 and this time the estimates are much higher. The Street is looking for an EPS of $0.96. The stock broke out to a new all-time high today and it won’t be unexpected if it runs in front of its next earnings report, especially if the market cooperates.