Kiplinger's Jim Glassman on finding the next Apple

Have you ever looked back in time it said boy I -- I invested 20000 dollars Apple's stock decade ago. Well I get done so you'd be in the -- today that's right 40000 dollar for the Apple Stock a decade ago. Is now worth over a million dollars we're joined by Jim Glassman he's writer and reporter in researcher at tip magazine. It's about eight stocks with star potential Jim welcome to the show are used her. Agent let's take a look at some your stock makes you think has star potential surprisingly. At least from my perspective you've got Netflix on this list. I do. Part of my velocity of finding a companies they're gonna do extremely well. Is to look for companies they're having a bad patch and certainly that's to a Netflix. But I really believe in Netflix has the other characteristic. Of the great companies that I am I'd list five of them. And you know motto of go through that really quickly the one as a strong leader which Netflix currently have. Product that combines art and science in touch customers parts where you might be argued there but. Certainly when Netflix started it was through a great global land and Netflix is. Bombing in global brand that the important. Aspect of Netflix using outside the United States. Confidence in the quality of the product. Toward our crisis well that's what that with -- trying to do and I think. Eventually we'll get away with it and then a strong balance sheet with Netflix as though. Don't I think those -- -- the five characteristic doesn't mean the company is doing great right now because if it is doing great right now that the price can be very -- Well and apple wasn't doing great a decade ago -- -- that's the whole point of the story. And I you have to find the winners out of a lot of companies that might be struggling in the current environment and one of those could also include. Zynga this is also on your list is -- GA. Absolutely true things I think has been hurt unnecessarily. By the problem. FaceBook and by the way. Don't get the FaceBook later I wrote this piece before the FaceBook. IPO but. I think I think it'd been unfairly. By is that in the united going to. Provide these online social games like farm bill worked with friends that are. Hugely popular. And so. Investors kind of mark -- down as a result of FaceBook but. I really think that mark -- Who is the genius stuff on I think here's a guy who's who's had success after that and I would definitely be betting on things. -- -- when you look at Zynga it's a six dollar stock -- they make money like how can they turn this into something where they actually make -- because they are losing a dollar 23 fair right now. Right I think they've got has that chance has been in some ways might have a better chance than and FaceBook to make. I mean think if selling company net. Debt in many cases become addictive and selling it for very small. Amount of money. I think this could be of people talked at this for a long time. About this could be the key to making money on the Internet it's multiplying. That dollar. Time. Three billion users because I think that eventually and not too long and now there will be three billion users on the network where -- about a billion at this point. So I think. I think that -- is in good position that we just have one other picture that made kind of weird but. I do believe especially in. Companies that are in the Internet space I would include. Netflix and that you do as investors need to have a certain amount of say. Is that the people who on the companies are gonna come up with. New ideas new ways to make money. I realized that sound like a shot in the dark but if you're betting on the on the leader. And on a proven leader. Dan it's not a bad that. No it could be nesting -- -- would raise your thought on FaceBook now. The U we've seen it now I think at 27 dollars this year do you think it's been oversold -- you think it'll come down lower where we can buy that share 'cause I know he had written about it. Right I don't of course I'm not gonna guess with the bottom has that I generally in general my. My feeling is that FaceBook is a body at this point. You do OK now lululemon. They missed on Friday the symbol LULU. He still bullish on this after your getting that report on Friday. Well it's true that and again this kind of it goes demise feeling that if you were going to be buying a company with that was with the opportunity or is that chance. To make. You know yeah. Ten Bagger product. For ten times -- maybe more. It's values that you really have to ignore what's happening in the very short term. A blast that's indicative of a longer term problem and I just don't think that's true with Lou I really don't. You know I think lululemon in the wanna talk about body companies that can mine. Art than science and art inside the touch customers part. You know that there aren't too many clothing retailers that fit that particular bill but I do think that blue -- And he he really does have. Every one of the five quality have talked about. Talk about the confidence. In the -- the product. Art art prices Lulu lemon has got that and it kind of amazing when you think about it that Lulu lemon has not been. By the downturn in the economy I think the economy is gonna get better and it gives you. Forecast land but I think it probably by next year and I think Lou on the gonna benefit from the and also gonna benefit from expansion. You know I was reading last week Massachusetts announced that they're gonna start. That -- researcher inducing legislation to start taxing Amazon.com. Sales days sales tax and all number of states are doing that. I like Amazon as a shopping port I use it frequently it's probably -- probably shopped here at least 34 times a year. We want you you also like both Amazon and eBay. Are you as bullish about Amazon given the rate of taxation that they're gonna be exposed to in the leveling of the playing field if you will. Well -- first off I would say that Amazon has been fighting this battle and born to you about. And has generally been except. And I would not bet against Amazon. Obviously. The Phil -- import and it it is it is an advantage. So but you know it's if it's not that much I mean you know it is -- is maybe 8% from state and did the alternative. Really at this point in the game bricks and mortar. Barely. I mean. It has has driven now. There's certainly a lot of bookstores in the country is the guy who they'll book America. Nobody knows what -- -- -- -- they're -- they're dying breed they are just like travel agencies are you mean Expedia put her travel agencies out of business. Amazon is also putting the electronic key -- retailers out of this. Exactly right exactly right to -- in that best buy yesterday at the best buys about how good all the laughs so. You know I'm not sure that that the -- percent or or the average is probably -- before 5%. Could it mean that much I just think that. Amazon is a great company and get these goes. Decided. To -- right from the start he's not gonna worry about quarterly earnings he was gonna make the investment that was necessary to build this company band. And right now he's putting huge amounts of money into infrastructure and he really want to make Amazon. Much more of a mobile business that is now. I just think Andy and -- -- dominate. Play it -- hardly. Yet and I think what they're doing hey I could be wrong but I think what they're doing is they're eliminating the competition with low prices right. Absolutely and once they've done that they'll have pricing power and then their margins will improve because one of the criticisms on their stock. Is that their margins are very wide but they're they're they're they're increase in market -- what 304050%. A year that's amazing. Absolutely and I actually had done a piece for kiplinger's. A month or two in advance of this one in which which was almost all about Amazon. And what you see when you look at the list of the top online retailers there's Amazon. Which does depend on how you define the market basically controls about 40% of the market and then there's everybody else. And everybody else is way way behind including. The other great retail at the America including. Target and in Wal-Mart when they -- that they are still far in the dusty. Still I agree with you I think that the that the strategy is to beat everybody with low prices and great serve and don't forget that Amazon as a novel on. Morality they're terrific and and and Jim I appreciate Tom I -- I -- go through the rest of the stock's gonna get him to come back on the show me out of what all right well we sure appreciate -- Jim Glassman folks from kiplinger's magazine. Great stock picks there he might wanna look them up yourself and do some research that. We had Netflix we had Zynga we had Amazon.com. And we had Lulu lemon he had a bunch of other ones we'll try to get those on another day.