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A 'Global Elite' business with a history of world-class innovation
March 12, 2019

From Stansberry Research:

Investing in "Global Elite" companies is one of our favorite strategies...

These businesses all share a common quality or trait. They have a significant brand, product, or service. They dominate their markets. They're considered financial battleships.

Most important to our success as investors... we need to recognize when these great companies offer buying opportunities. When great companies decline by 20%, we get interested. When they drop by 25% or more, they really grab our attention.

When volatility hits the share price of a Global Elite company, don't hide from it.

Instead, you need to embrace it.

Take what happened recently with tech giant Apple (Nasdaq: AAPL)...

Apple plays a huge role in almost everyone's life. It's a global leader in consumer products. And it has massive brand value... Forbes ranks Apple as the world's most valuable brand.

Innovation is at the center of Apple's strategy...

Over the past 15 years, we've seen a revolution in mobile technology. Devices evolved from offering basic calls and text messages to e-mail and Internet access. Smartphones can now stream video, recognize a face or fingerprint, and even perform basic measurements.

Apple has played a pivotal part in pushing this technology forward...

It changed the way we listened to music when it introduced the iPod in 2001. It turned mobile phones into smart devices with the iPhone. Next came the iPad and Apple Pay.

Plain and simple, Apple welcomes and prospers from change...

It has grown from $5.4 billion in annual revenue in 2001 to roughly $265 billion today. That's an incredible 25%-plus compound annual growth rate over nearly two full decades.

And now, Apple is leading the way in a new frontier... wearable technology.

In 2015, Apple released the first "Apple Watch"... It's a smart watch that can track your activity, make phone calls, send text messages, allow you to order food, and much more. The company hopes the Apple Watch will revolutionize the watch industry, much like the iPod and iPhone did for the digital-music and mobile-phone industries, respectively.

People rushed to the stores to buy it... In its first year, the Apple Watch sold more than 11 million units. Apple's market share in "wearables" jumped from 0% to 15% in just a year.

Before long, Apple rose to the top of the expanding market for wearables... The company owned about 27% of the market at the end of 2018, according to research firm IDC.

Plus, Apple continues to invest heavily in the Apple Watch – and its other devices...

It has hired dozens of doctors in recent years to grow its footing with health-related technology. The company's Apple Watch Series 4 – released in September – now includes an electrocardiogram app that can monitor wearers' heartbeats for any potential issues.

But the Apple Watch isn't the company's only wearable technology...

In December 2016, Apple released "AirPods" – wireless Bluetooth-connected earbuds that allow users to listen to music, make or answer phone calls, and communicate with Apple's digital assistant, "Siri." In its first year, Apple shipped up to 16 million sets of AirPods.

Only a little more than two years after their release, AirPods have become Apple's most popular accessory. They're so popular, in fact, that Apple plans to release a new version this year that includes wireless-charging capability. One Wall Street analyst believes the new AirPods could help boost sales to 55 million units in 2019... and up to 110 million by 2021.

It's clear that this is a cash cow for the company... The "Wearables, Home, and Accessories" segment brought in more than $17 billion in sales in 2018 – nearly double its 2015 total.

And it's outshining Apple's previous innovations...

In January, CEO Tim Cook told cable network CNBC that "the revenue for wearables is already 50% more than iPod was at its peak." The Apple Watch and AirPods have each generated four to six times more sales than the iPod did in the same span from its launch.

This emerging trend doesn't appear to be slowing down anytime soon... Apple's wearables and accessories segment will keep driving growth and producing tons of cash going forward.

Despite all that, Apple's stock fell on hard times at the end of last year...

In October, concerns developed that slower smartphone demand would hurt future iPhone sales. And as you know, the broad market also sold off in the final few months of 2018.

The uncertainty pushed AAPL shares down nearly 40% in just three months... The stock traded at more than $232 in early October. It bottomed at about $142 in early January.

But great investors who embraced the volatility have been rewarded... AAPL shares have since jumped about 20% off their bottom – nearly doubling the S&P 500 Index's return.

Sometimes investing is simple.

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