New York City is one of the most interesting, and most expensive, real estate markets in the world. No matter what is going on in the economy, demand for apartments, condos, and co-ops in the city never seems to go down. 

In fact, after the mortgage crisis was destroying markets all over the country, NYC's market experienced just a 10% dip from the pre-crisis highs. According to Zillow, the average home price in the city peaked at $514,000 in 2006, and bottomed out at $461,000 in 2009. Since that time, the average home price in NYC has rebounded and is just shy of its pre-crisis peak.

There are always plenty of people, especially young professionals, who consider moving to New York for a variety of reasons, including careers and social lives. So, for the benefit of those would-be New Yorkers, let's take a look at what the average price buys you in several areas of New York City. Zillow says the average right now is $503,000, so let's make that our "cap."

1. Downtown Manhattan
Those who insist on being in the center of the action, $480,000 will buy you a small (doesn't say but looks to be less than 500 square feet) 1-bedroom apartment just steps from Times Square. There are many like this one to choose, and in our price range, nothing had more than one bedroom or 600 square feet.

Source: Trulia.

2. Harlem
This is a great way to live in Manhattan and stretch your dollars a bit. For $499,000, you can get this 3-bedroom, 1.5-bathroom condo just steps from the subway. The 958-square foot floorplan isn't enormous, but is big enough that you could have a roommate or two without feeling too cramped.

Source: Trulia.

3. Brooklyn
The place to be if you need a lot of space, or if you want to have a lot of roommates, Brooklyn is loaded with homes in the price range that have up to 8 bedrooms and 4,000 square feet of space. This 5-bedroom example with 2,320 square feet is in very good shape and is configured as two units, a 3-bedroom and a 2-bedroom. The home also has relatively low property taxes and is close to the subway into the city.

Source: Trulia.

4. Queens
Most of the half-million dollar homes in Queens are attached homes, but this 3-bedroom, 2-bathroom example is a single-family home with an updated kitchen and bathrooms that is on the market for $485,000. While the amount of space (just over 1,100 square feet) isn't huge, you do have a pretty good sized yard for a house in the city. 

Source: Trulia.

5. Staten Island
Staten Island is where you can get the most for your money in NYC, which makes sense as it is the furthest borough from Manhattan. For example, $490,000 will get you this very well-maintained 3-bedroom townhome that has a ton of upgrades and access to a community pool, gym, sauna, and tennis courts.

Source: Trulia.

Foolish final thoughts
When considering buying a home in New York, it really comes down to how close you want to be to all of the action of the city. If space is a priority, it is truly amazing how much further your dollars will go just a short distance from downtown, and often very close to a subway line that will have you downtown in minutes.

For some, there's simply no replacing the feeling of being right in the middle of it all. Of course, this is why Manhattan real estate is so expensive in the first place!

Tesla Motors is rolling again, but bears aren't convinced. Even with the better-than-expected nearly 6,900 Model S sedans that were sold and delivered during the holiday quarter, skeptics wonder if the lofty valuations are justified. Is a market cap of $21 billion too much for a company moving 2,300 cars a month?

The answer, of course, is that Tesla isn't expected to move 2,300 cars a month forever, just as its average of a little over 1,800 cars a month the quarter before that didn't stick. Tesla will continue to ramp up its assembly lines, and it has big visions about where it will go.

During Tesla's third-quarter call, Elon Musk detailed annual demand goals that would result in selling 20,000 Model S cars in the U.S., another 10,000 in Europe, and another 10,000 to 20,000 everywhere else. If the Model X crossover that will hit the market in a few quarters meets similar demand, we would be talking about 100,000 cars a year between the two models. 

It naturally won't play out that way. The Model X will be incremental, but some of that demand will probably come at the expense of eating into Model S sales. Then again, things can get even better, since having two distinct models will help increase awareness of the brand. Asia could also be a huge market for Tesla at a time when the world's most populous nation is throwing its weight behind electric passenger cars.

However, it seems as if Musk feels that demand is something that can be orchestrated.  

"It doesn't make sense for us to do things to amplify demand if we can't meet that demand of production," he said back in November's earnings call. 

Amplify demand? Naturally, we're talking about marketing, but it remains to be seen what that would entail. It's not as if there are polo tournament sponsorships or full-page ads to be taken out in I Light Cigars With $100 Bills Monthly magazine. Tesla cars aren't cheap, and this isn't the kind of stuff that will change by forking over $4 million for a Super Bowl ad. 

It's not even the wealth factor, given the size of the addressable market that can afford a Model S or what will be a comparably priced Model X. There's also the "range anxiety" issue for a car that can't be compared to other premium vehicles since it needs to be plugged in between charges. Tesla's been building out a fleet of charging stations across the country to make cross-country trips possible -- and Musk himself will be embarking on such a trip later this year, when his kids are on spring break -- but that still complicates long journeys by mapping out the station locations and setting aside the time to charge up. 

Then again, it's fair to say that a Tesla owner will typically spend less time at a charging station than is cumulatively spent by other drivers at gasoline stations over the life of their vehicle ownership. That's a point that hasn't been amplified enough, and one would think that these charging stations will factor greatly in its marketing in the future, since it sets Tesla apart from the growing number of automakers putting out much cheaper electric cars. 

If production surpasses demand, Musk's plan to amplify demand will make all of the difference between whether Tesla shares continue to obliterate the market or fall back to earth.

It is now estimated that last month's massive Target data breach may have affected more than 100 million customers, with stolen information dating back a decade. Over the next few weeks or months, new facts will emerge as to what exactly happened and why.

However, this data breach might not be Target's biggest problem long term. Target also has to address the growing competition from industry peers Wal-Mart Stores  and Costco Wholesale , the effects of online retailers like Amazon.com , and the changing retail environment altogether.

Target store. Credit: Company website.

Target's new fourth-quarter outlook
2013 third-quarter earnings for Target shadowed negative trends in recent quarters. Earnings per share came in at just $0.54, missing consensus estimates of $0.64. Revenue also came up short while comp sales increased just 0.9% compared to the 2.9% gain in the same quarter of 2012.

Target has been below EPS estimates in two of the last three quarters and has not met or beat revenue expectations since the fourth quarter of 2012.

The company blames its 2013 struggles on its new Canadian segment. The 124 planned store openings, which began in March 2013, have not gone as smoothly as Target had planned. Excess inventory due to disappointing sales is forcing Target to reduce prices, which consequently negatively affects gross margins.

With more news being uncovered on how widespread the data breach is, Target has now cut its 2013 fourth-quarter outlook by $0.30 and expects comp sales for the quarter to be negative.

Target data by YCharts

Target vs. Wal-Mart and Costco
One of the main reasons for Target's Canadian market entry was to increase its presence globally and compete with the likes of Wal-Mart and Costco.

Target currently has 1,919 locations, with 122 of the planned 124 in Canada already built. However, this pales in comparison to Wal-Mart's 11,137 company stores across 27 countries including the Supercenter and Sam's Club concepts.

What makes matters worse for Target is that Wal-Mart is now invading areas that have been Target strongholds for years. This past December, the first Wal-Mart store opened in Washington, D.C. Target had little to no competition when it opened its Columbia Heights store in Washington, D.C. in 2008.

Costco's December sales results showed that the membership warehouse continues to gain traction in retail. Net sales increased 6% to $11.5 billion across the company's 648 warehouses, which include more than 200 outside the U.S.

Costco's membership renewal rate is what is really leaving a long-term dent in Target's business model. Costco is currently seeing the highest renewal rates in company history at 90% in the U.S. and Canada, despite the November 2011 membership-fee increases.

Furthermore, the expansion of its ancillary businesses, which include gas stations, pharmacies, car washes, and even travel services, is expected to bring in more members. As a result, the company is giving customers more reasons to go to a Costco and less to visit a Target.

Showrooming for Amazon.com
A 2013 Placed study revealed some of the top retailers that are used for Amazon.com showrooming -- the act of examining products at brick-and-mortar stores before buying those same products on Amazon.com. One of the reasons why Target was not the biggest victim of showrooming for Amazon.com was because of its year-round price-matching program. Long term, this program can eventually eat away at margins and limit future earnings potential.

However, more alarming is the growing membership of Amazon Prime -- the $79/year membership program that offers free two-day shipping among other perks for Amazon.com customers. The company stated that it added more than 1 million new subscribers in the third week of December alone. It is estimated that 20 million-25 million U.S. and 15 million international households hold at least one Prime account.

Both of these trends are critical to Target's long-term business model. The Placed study shows that even with price-matching Amazon.com prices, Target is still a victim of showrooming. As more people join Amazon Prime, this means there are more customers with an incentive to stay home and order from Amazon.com than shop at a Target.

The retail promotional environment and improving economy
The promotional environment in retail may also hurt Target in the next several quarters. The domino effect that has been created by retailers attempting to sell off excess inventory at greatly reduced prices may reduce traffic further at Target stores. In particular, customers shopping for apparel may find better deals at their favorite brand-name stores.

Clothing retailers like Abercrombie & Fitch and Eddie Bauer, which have strong online presences, saw strong holiday sales.

As the economy improves, increases in discretionary income may hurt Target further. With extra money to spend, customers may choose to visit the shopping mall or their favorite retailer online instead of Target to buy the things they have been waiting to buy as the economy improves.

Target debit and credit REDcards. Credit: Company website.

Bottom line
The Target REDcard, which gives 5% discounts for all purchases, is a major driver of store traffic. In fact, nearly 20% of all sales are paid for by a REDcard. The entire data breach outcome, which includes the uncertainty of liabilities, reimbursements, and civil-litigation costs, only adds to existing company concerns. It is likely that the data-breach storm will dissipate given enough time. However, growing competition and the changing retail landscape may be Target's bigger problems.

Caterpillar will release its quarterly report on Monday, and investors have grown increasingly nervous about whether the heavy-equipment manufacturer will be able to recover from its share-price drop over the past two years. Even though rival Joy Global and farm-equipment specialist Deere have also gone through challenging times lately, Caterpillar has taken a double hit from its twin focus on construction equipment and mining equipment.

Caterpillar is a global leader in heavy equipment, enabling other companies to do their work efficiently. But with many of those customers facing huge financial challenges of their own, Caterpillar has seen substantial sales declines, especially in formerly fast-growing areas like the Asia-Pacific region. Meanwhile, the specter of new competition from General Electric in the mining-equipment business will give Caterpillar even more problems to overcome. Let's take an early look at what's been happening with Caterpillar over the past quarter and what we're likely to see in its report.

Source: Caterpillar.

Stats on Caterpillar

Source: Yahoo! Finance.

When will Caterpillar earnings start growing again?
In recent months, analysts have pulled back on their projections for Caterpillar earnings, cutting their fourth-quarter estimates by $0.03 per share and their full-year 2014 expectations by almost 3%. The stock hasn't made much progress, gaining just 2% since mid-October.

Caterpillar's third-quarter report continued a long string of disappointing results for the heavy-equipment maker. Sales fell by more than 18%, sending net income down 44% as the company struggled under terrible conditions in its key markets. Orders for mining equipment from the Asia-Pacific region fell by 63%, as mining companies responded to the plunge in prices for many precious and base metals by delaying or cancelling plans to make big capital expenditures. Caterpillar slashed its full-year guidance yet again, slicing a full $1 per share from its earnings-per-share expectations and lopping off another $1 billion-$3 billion from its revenue guidance, and announced workforce reductions and plant closures to control costs.

Caterpillar still has huge competitive advantages on its side to help it recover when industry conditions improve. With its combined construction and mining equipment line, it has economies of scale that Joy Global can't match, and even though it doesn't have the benefit of major exposure to the agricultural industry that Deere has, Caterpillar nevertheless has the reputation as the top choice for many customers to satisfy pent-up demand whenever those customers get around to spending again.

Caterpillar's share price has gotten low enough that some value-oriented investors are taking notice. Last month, one analyst upgrade pointed to the relative success of Caterpillar's power-systems business, which includes train locomotives as well as gas engines and turbines. That segment has suffered smaller revenue losses than its construction and mining businesses.

The big question for Caterpillar in 2014 is whether activity levels in mining and construction will perk up in 2014. Most investors expect little from the mining sector this year, but early jumps in precious-metals prices could lead to at least a temporary respite from further sales declines in the segment. On the other hand, recent data pointing to sluggish manufacturing activity in China could weigh on Caterpillar's construction business as well as holding back power-systems sales.

In the Caterpillar earnings report, watch for the latest on competition the company is dealing with. Between Joy Global, Deere, and General Electric, as well as Chinese companies that are starting to make better equipment of their own, Caterpillar needs to retain its dominance over the industry in order to take maximum advantage of a rebound when it comes.

Click here to add Caterpillar to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

(image courtesy Green MPs, via Flickr)

Solar power is increasingly becoming a force in America. As consumers learn about the environmental benefits, cost savings, and innovative technology of using solar power, Solar firms have gained traction and profits. While utilities have been slow to adopt solar energy (surprise-surprise), residential solar adoption has soared. As more Americans install photovoltaic (PV) solar panels, continue to look for SunPower Corporation, SolarCity, and SunEdison  to shine in 2014.

The Sun is power
SunPower Corporation has been rated as a strong buy from Zacks Investment Research and has been tagged as overweight by JPMorgan Chase. These new stock ratings for SunPower are a harbinger of a profitable 2014 for the firm. the stock grew over 336% last year. While the stock did dip slightly in the fourth quarter of 2013 (and again this past week), rising power rates, public understanding of solar technology and increasing solar panel installations bode well for SunPower in 2014.

SunPower has been aggressively building its business by expanding it's products and services. It has quietly become the "general store" for customers wanting to harness the sun to slash or outright remove electricity bills. SunPower's approach is in stark contrast to its rival, First Solar . While First Solar concentrates on utility and large-scale power plants, SunPower has staked its claim in the residential and commercial space. SunPower's residential solar leasing product offering is becoming popular with consumers in the U.S market. These PV installations have been a boon for both SunPower and its customers because of the generous tax incentives in place for promoting sustainable green technology by the U.S. government. SunPower also makes money from these installation by charging customers a low monthly payment.

A growing customer base
The firm currently has 20,000 active leases. SunPower's lease numbers are growing fast and are certainly impressive, but they are well behind SolarCity . SolarCity is the largest residential solar installer in America. It commands 32% of the U.S. market—and growing. The surge in solar installation in America is really astounding. Americans are not content with putting on a sweater and paying rising electricity costs—they are turning to solar.

Residential solar photovoltaics (PV) installations are up 61%. SolarCity recently unveiled a new program to install solar panels for 30 homebuilders in over 100 U.S communities. The SolarCity Premium Service Package is the key component of the new program. Homebuilders are lining up to take part in this program since home buyers want solar panels—and homebuilders need to satisfy customers. Both SunPower and SolarCity will continue to grow as more people put solar panels on their roofs to mitigate higher electricity bills.

Sun and silicon mix

The Echo Solar web interface

SunEdison Inc will be a winner in the solar installation game. It makes silicon wafers, the stuff that makes solar panels—solar panels. It develops and sells photovoltaic energy solutions, it develops surface features, electrical and crystal properties, and it ensures panel purity levels—all the technical stuff to make solar viable. This firm has some great residential products. The Echo Solar System is a complete solar solution that includes the external solar panels and other necessary equipment. This system also comes with a web dashboard for homeowners that allows them to monitor the entire system—all in the browser. SunEdison shares were recently upgraded by Gilford Securities from $13 to $18 per share.

Solar stock numerology
SunEdison shares are up over 10% for the year. At $14.41 per share, this stock is affordable. With a strong market cap ($3.8 billion) and healthy institutional ownership (90%), SunEdison is a safe solar play. SunPower is a more aggressive play, but has plenty of upside for those willing to take the gamble. This stock is up over 20% since January 2013. SolarCity shares have been on fire over the past year. They've slipped recently, but don't let this dissuade you. The trend is on SolarCity's side.The recent "Polar Vortex" electricity bills are sure to help..

The only "real" concerns for these firms are the DIY solar systems and Chinese competition. For many DIY will never be an option—people these days don't want to cut their own grass or cook their own meals, let alone install a PV system on their roof. The Chinese economy is also slowing down, and Chinese citizens are starting to bristle at all the pollution. 

The three firms I've showcased add real value. They create products and services that solve problems, and that is what you need to be investing in—problem solvers. 

According to the Department of Labor Statistics, in fact, there's a strong positive correlation between the amount of schooling an individual completes and their future earnings. So opponents of getting a college degree can put that in their pipe and smoke it.

Choosing a college, however, is one of the most difficult and stressful decisions for high school juniors and seniors. Eventually, they'll choose a school based on prestige, location, sports teams, or perhaps a school specializing in their intended major. But will that end up the right choice?

The problem is that upon graduating you finally realize that college should've been about choosing an institution that will help you find a job. And in today's economy, the fact is some colleges are better at opening doors than others.

With that said, I have compiled -- with the help of US News and Payscale.com -- the 10 best colleges in the Southeast to prepare future students not only to earn a job after graduation, but to go on to earn fantastic salaries.

Displayed below are the 10 best colleges in the Southeast for average alumni income based on a survey conducted by Payscale.com.

Investors were hoping for signs of a quick turnaround when International Business Machines reported its fourth quarter and fiscal 2013 results. Unfortunately, IBM's progress is slower than the market would like. IBM's fourth quarter continued its trend from recent quarters of earnings growth against declining revenue.

From the market's perspective, cost cuts and share buybacks to engineer profit growth aren't good enough. While it's understandable to be disappointed over IBM's lackluster revenue performance in 2013, it should be given time to get its business back on track. IBM is a huge company, and turnarounds of this nature don't happen overnight. That's why Foolish investors would be wise to not overreact to IBM's disappointing earnings report.

IBM: A company in transition
The market was clearly displeased with IBM's report as well as its outlook, since the company's shares fell 3% after it released results. To be sure, there were enough disappointing items to complain about. Investors count on IBM for top-line growth due to its status as a world-class blue chip, but the company is stumbling in one key area.

For many years, IBM was known as a hardware company. Over the past few years, however, management decided to take the company in a new direction—and rightfully so. IBM deserves credit for seeing the writing on the wall in the technology world. Hardware is a shrinking business; going forward, growth will be most pronounced in software and services, particularly in cloud-based solutions.

IBM has transitioned itself to become much more of a technology consulting business, which has been a wise decision. This is what separates IBM from Hewlett-Packard , which has, for the most part, remained stuck in the hardware industry. All of HP's seven core operating segments saw revenue decline in the most recent year, led by its personal systems and printing group. Those segments produced a double-digit revenue decline.

Not surprisingly, hardware continued to be the sore-spot for IBM as it has for much of the past several quarters. In the fourth quarter, hardware revenue collapsed 26%. Fortunately, IBM's hardware business accounts for a relatively modest portion of its total revenue base. Nevertheless, the damage in the fourth quarter more than offset relatively decent results in the company's two larger segments, software and services. This is why total revenue fell 5% in 2013.

A $200 billion company doesn't turn on a dime
Large-cap technology giants simply can't turn their businesses around in a matter of a few quarters. Notice the changes being attempted at Oracle , which is in the middle of a similar shift to cloud-based solutions and services. Revenue from new software licenses and cloud software subscriptions in its most recent fiscal quarter ended November 30 was flat year over year. In addition, revenue from hardware systems products fell 3% in the same period. Total revenue inched up 2%, so it's clear that these types of transitions take time.

IBM is a $200 billion company by market capitalization, so its own turnaround will likely take more time. The market seemed disappointed with its fiscal 2014 projections, even though IBM expects to earn adjusted earnings of at least $18.00 per share. This would actually represent 10% earnings growth, and IBM remains fully committed to its promise to earn $20 per share in operating earnings by 2015.

IBM still generates a lot of free cash, which it will reinvest in the most promising growth areas going forward. Revenue growth may not materialize in the near term, but the company will still produce earnings growth from using some of its prodigious cash flow to buy back stock. In the meantime, investors can snatch up IBM for just 10 times forward earnings, with a 2% dividend yield as a nice bonus. That's why long-term investors would be wise to be patient with IBM.

Bank of America , Citigroup , and AIG have all crushed the market over the past year or so, but all three still trade below book value. What causes a stock to trade below book value? In this segment from The Motley Fool's everything-financials show, Where the Money Is, banking analysts David Hanson and Matt Koppenheffer take a question from their mailbag about this issue and tell viewers which of these three stocks they like the best.

The Dow Jones Industrials are the most-followed stocks in the market. But when recent changes to the average brought Visa and Goldman Sachs into the Dow, it changed the average forever.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, goes through exactly how Goldman and Visa transformed the Dow. Dan notes that the Dow is price-weighted, meaning that stocks with high share prices have the most influence in the average. With Visa carrying the highest price of the Dow 30 and Goldman coming in at No. 3, the two new entrants represent 16% of the Dow's weight. Dan also describes how the move hurt IBM , which used to be the most influential Dow stock but saw its weighting go from nearly 10% to just 7% because of the changes. Dan concludes that investors have to be aware of how the Dow no longer tracks the S&P 500  and other broad market measures as well as it used to because of the change.

Many of the biggest and most profitable ideas from the past half-century have emerged from the same unlikely place.

The world's greatest investor stumbled upon his now-famous philosophy by reading a book about -- you guessed it -- investing. A shoe empire was conjured up by mimicking the Japanese approach to manufacturing cameras. The idea behind the largest retail company of all time was inspired by a small-town barber who showed a budding Arkansas merchant that the American consumer longed for low prices.

In all of these cases, the ideas that transformed industries and vastly enriched investors were lying in plain sight, simply waiting to be happened upon by a person with the foresight to recognize their potential and the audacity to pursue them.

The "discovery" of Starbucks
In 1981, a 28-year-old salesman of kitchen appliances noticed that a tiny retailer in Seattle was ordering an unusually large number of drip coffeemakers. Intrigued, he decided to investigate further, booked a plane ticket from his home in New York City, and arranged to meet with the company's management team upon arrival.

By his own account, Howard Schultz wasn't on the prowl for an entrepreneurial venture. He was earning good money at his current job, drove a company car, owned an apartment on Manhattan's Upper East Side, and was in the process of wooing his future wife, who was simultaneously establishing herself as a furniture designer and marketer. Instead, it was Schultz's job to court clients, and that's what he was flying out to Seattle to do.

Indeed, even if he were looking for the next big thing, it seems unlikely that the specialty coffee industry -- much less Starbucks , a chain of six coffee shops with little interest in further growth -- would have caught his attention. "Coffee was not a part of my childhood," he wrote years later. And while it's hard to fathom now, few people at the time drank the expensive, high-quality product that Starbucks served and has since become known for.

Yet Schultz was immediately captivated. He explains being "hooked" before finishing his first cup of Starbucks coffee. "I felt as though I had discovered a whole new continent," he recounts in his autobiography. And the feeling was even more powerful when, two years later, he happened upon the inspiration for the modern incarnation of Starbucks -- that is, an espresso bar -- while walking the streets of Italy. "It was so immediate and physical that I was shaking."

Where big ideas are found
To me, the story behind Starbucks speaks directly to the "discovery" of big ideas -- and, more specifically, to the fact that they hide in plain sight.

By the time Schultz first laid eyes on one of its actual stores, Starbucks had been in business for more than a decade. Tens of thousands, if not hundreds of thousands, of customers had passed through its doors. Yet it took a 28-year-old kitchen-appliances salesman with no previous passion for coffee to truly grasp its potential and then act on it.

And, to be clear, Schultz's experience is not unique. Many, if not most, of the other great ideas to have emerged over the past few decades are variations on this very same theme.

Sam Walton, the founder of Wal-Mart , switched to discount retailing after a nearby barber opened stores with the philosophy: "Buy it low, stack it high, sell it cheap." Jeff Bezos developed the idea for Amazon.com after reading that the Internet was growing at 2,300% a year in the early 1990s. And Phil Knight, the man behind Nike , watched the Japanese co-opt the camera industry by producing less expensive products and figured the same model would work for running shoes.

For the budding entrepreneur and investor, the lesson from these experiences is simple. The secret to discovering the next big idea isn't that you should go out and look for it harder than anyone else. What's the use if it's simply lying around in plain sight? The secret is instead to leave yourself open to identifying it when the idea finds you and, more importantly, to then actually do something about it.

Long-range. High-flying. Super stealthy. By 2020, the United States Air Force hopes to develop a new type of long-range bomber that will be all of these things. Problem is, the Air Force also wants to spend upwards of $55 billion building a new bomber capable of carrying out strikes with both conventional and nuclear arms. That's quite a pretty penny. But is there a way to support the third leg of America's "nuclear triad" ... on the cheap?

Boeing's B-1 bomber. Nuclear strike capability on the cheap. Photo: Wikimedia Commons.

As a matter of fact, there may be. As a matter of another fact -- Boeing is already doing it.

This week, Boeing confirmed that it has begun delivering to the USAF a baker's dozen of "new" bombers. Actually, they're old bombers -- B-1 Lancers originally built by Boeing for the Air Force back in the 1980s. But capable of flight at altitudes up to 60,000 feet, and flying at speeds past Mach 1.2, they're perfectly serviceable bombers for most missions. And thanks to a new Air Force program to upgrade the warbirds, America's B-1 fleet could soon be transformed into what the website The Aviationist calls a "brand-new aircraft."

B-1 bomber, showing its stuff, and giving viewers vertigo. Photo: Wikimedia Commons.

To date, Boeing has won three separate "Lot" contracts for upgrading the B-1:

• A $99.5 million July 2011 award to "integrate ... the Vertical Situation Display Unit in the forward cockpit and ... the Fully Integrated Data Link and the Central Integrated Test System in the aft cockpit" on four B-1s -- upgrades collectively designated the Integrated Battle Station, or "IBS."
• A follow-on $65.8 million award to upgrade nine more B-1s with IBS, awarded in June 2012.
• A subsequent third award for $59.8 million, covering upgrades on 10 more planes.

Boeing says the upgrades "provide B-1 bomber aircrews with a higher level of situational awareness and a faster secure digital communication link ... and will make the B-1 cockpit more reliable and supportable." Over the next five years, each plane will be equipped with multiple multi-functional color displays to monitor their data. New wiring, digital avionics, data links, electronic maps, and aircraft performance monitoring computers will also be installed.

With a completion date targeted for 2019, all 62 of the Air Force's B-1s should be upgraded before the 2020 deadline for the Air Force wanting its "new bombers." Best of all, the Air Force will be getting these planes at a very nice price.

Nuclear math
To date, Boeing has won three IBS upgrade contracts to supply upgrade kits, spare parts, and engineering support needed to upgrade 23 aircraft at a total cost of $225.1 million. But the cost of upgrading each incremental plane is falling as the work progresses. At the most recent rate -- $6 million spent to upgrade each plane in Lot 3 -- it appears the Air Force could end up spending less than $460 million to upgrade its entire B-1 fleet.

That's less than 1% of the projected $55 billion price tag for building an entirely new fleet of stealth long-range bombers -- the B-3 bomber project.

How to fight a nuclear war on the cheap
And this raises an interesting question: If the Air Force is on track to refurbish 62 new long-range bombers by 2019, does it really need to spend $55 billion developing a new class of stealth bomber? Granted, with many B-1 bombers aged 30 and older, the fleet will need to be replaced eventually -- but not immediately. The U.S. Air Force Air Combat Command is on record saying B-1s will still be flying well into the "mid-2040s." Similarly, the Air Force's six dozen-odd B-52 bombers are expected to keep flying through 2040.

Are these planes as super-stealth as the planned B-3 bomber? Probably not. But B-52s have been serving America well for decades, and not one has been shot down since the Vietnam War. Stealth-wise, the B-1 is said to have a radar cross section 69 times smaller than that of the venerable B-52, and should be proportionately harder to hit.

That sounds pretty stealthy to me. Maybe even stealthy enough that we can just "work with what we've got," cut $54.5 billion out of the defense budget, and leave the B-3 unbuilt.

This one looks good. How about we take the B-3 off the drawing board? Illustration: Wikimedia Commons.

DuPont will release its quarterly report on Tuesday, and until recently, investors saw the chemical giant as a strong play on agricultural growth. But even as it aims to concentrate even more strongly on the same agricultural products that have brought Monsanto and Syngenta so much success, DuPont earnings could suffer if a new emerging-market financial crisis takes away the international growth potential that the company is counting on.

DuPont used to be a more diversified chemical company, but trends in the industry have made it clear that certain areas are much more profitable than others, at least at this point in the economic cycle. As DuPont moves forward with divesting less profitable businesses, the question for shareholders is whether its strategy will prove successful even in the face of heavy competition. Let's take an early look at what's been happening with DuPont over the past quarter and what we're likely to see in its report.

Source: DuPont.

Stats on DuPont

Source: Yahoo! Finance.

Can DuPont earnings keep soaring?
In recent months, analysts have largely stayed steady on their views about DuPont earnings. They've cut their full-year 2014 estimates by a single penny per share, but that hasn't stopped the stock from climbing another 2% since late October.

DuPont posted mixed results in its most recent quarterly report. The company beat earnings estimates by $0.04 per share, but it didn't produce as much revenue growth as investors had hoped to see. The results showed the disparity between DuPont's agricultural segment and its chemicals business, with operating earnings rising 11% in agriculture but plunging 38% in performance chemicals, due largely to falling prices in key chemicals like titanium dioxide.

That's the big reason that DuPont's board of directors authorized the company to separate its performance chemicals unit from the rest of the company. DuPont hopes that the spinoff will unlock shareholder value and make it easier for investors to choose whether they want exposure to the slower-growing chemicals business or the more higher-growth ag segment.

As a result, the most promising parts of DuPont's future appear to be coming from agriculture. Last year, the company entered cross-licensing agreements with Monsanto to allow DuPont to use some of Monsanto's crop traits, giving it broader access to key technology to keep customers from entirely jumping ship and switching to Monsanto seeds. With Monsanto having made similar agreements with Dow Chemical , it's clear that competitors are finding ways to bolster the entire industry rather than seeking to lock out rivals from offering traits entirely.

At the same time, though, DuPont has other promising prospects. For instance, DuPont has the potential to become a more important provider of materials for the solar industry, where the rise in residential solar projects could boost demand substantially in 2014.

In the DuPont earnings report, watch to see whether the company can produce seed and other agricultural products that perform well against Monsanto, Syngenta, and Dow. With so much now at stake, DuPont can't afford to have its campaign into agriculture fall short of the ambitious expectations investors have.

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Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

In a holiday-shortened week, the Nasdaq suffered its worst showing since last June, while the S&P 500 put in its worst showing since May 2012, and the Dow Jones Industrial Average hadn't seen such a bad week since November 2011. The Dow lost 579.45 points, or 3.52%, as the S&P 500 fell 48.41 points, or 2.63%, and the Nasdaq slid 69.41 points, or 1.65%. The bulk of the declines came on Thursday and Friday, with Thursday's news that China was experiencing its first manufacturing slowdown in nearly six months causing investors to pull funds from emerging markets. That just made a bad week worse.

But it wasn't all bad news in the markets. Even as 28 of the Dow's 30 components fell, Microsoft managed to rise 1.15%, making it the index's biggest winner of the week. Investors reacted positively to the company's quarterly earnings, which came out Thursday after the closing bell. Sales of $24.5 billion and earnings per share of $0.78 beat analysts' estimates, as the company's Xbox unit really delivered: Microsoft moved a combined 7.4 million Xbox One and 360 units, compared with 5.9 million the previous year. The Surface tablet finally seems to be catching on, too, as the company doubled its sales within that unit to $893 million. Investors were no doubt relieved to see Microsoft can keep growing its revenue, and the positive trend looks as though it should continue.  

Last week's big losers
The last time the Dow's biggest loser for the week lost more than 5% was the last week of November, when Cisco lost 5.8%. But this past week, even the third-place loser lost more than that, as shares of Travelers fell 5.91%. The company reported solid earnings early in the week, with net income more than tripling from a year ago to hit $2.70 per share as the company's catastrophe payout fell from more than $1 billion a year ago to just $53 million this past quarter. But investors were concerned with the company's deteriorating margins this past quarter, and shares declined for the remainder of the week.  

The second worst performing Dow component was General Electric . The bulk of its 6.13% drop for the week came on Friday, as investors began to express concern for the overall health of the world economy. GE not only operates all around the world but also needs large and expensive infrastructure projects to grow revenue, so for GE, a slowing world economy equates to a coming revenue slowdown. Still, investors should keep in mind that the economic report out of China is the only recent indication we have that major economies might be slowing. In other words, a slowdown is just speculation at this point. GE investors would be wise to sit tight and wait another few months to see how things play out.

Finally, this past week's biggest Dow loser was DuPont , down 6.32%. DuPont's decline wasn't due to a company announcement, a ratings downgrade, or a big contract signed by a competitor. As with GE, it appeared to be investor fear over the global economy. Over the past few years, as DuPont has sold off parts of its business and increased its focus on other areas, it has positioned itself to be more dependent on positive economic conditions. The combined news that China may be slowing, that the Federal Reserve may taper more of its asset purchase program, and that emerging markets are weakening sent DuPont's shares tumbling.  

The other Dow losers this week:

• 3M, down 5.16%
• American Express, down 4.41%
• AT&T, down 0.83%
• Boeing, down 2.71%
• Caterpillar, down 5.76%
• Chevron, down 2.51%
• Cisco, down 2.37%
• ExxonMobil, down 4.34%
• Goldman Sachs, down 4.9%
• Home Depot, down 2.27%
• Intel, down 4.02%
• IBM, down 5.49%
• Johnson & Johnson, down 4.68%
• JPMorgan Chase, down 5.19%
• McDonald's, down 0.52%
• Nike, down 2.49%
• Pfizer, down 3.21%
• Procter & Gamble, down 0.87%
• Coca-Cola, down 1.12%
• United Technologies, down 2.11%
• UnitedHealth, down 1.26%
• Verizon, down 1.48%
• Visa, down 4.7%
• Wal-Mart, down 2.32%
• Walt Disney, down 1.87%

The International CES is the world's largest consumer electronics show, and a showcase each year for the biggest new things in consumer tech. This year, The Motley Fool's Rex Moore caught up with one of the world's leading tech columnists at the show, David Pogue of Yahoo Tech, to get a breakdown of the hottest new trends in electronics that could soon be hitting the market.

3-D printing was huge at CES this year. Exhibiting companies such as 3D Systems , Stratasys , and Makerbot (now owned by Stratasys) are bullish on consumer adaptation of this technology, and the consumer interest is certainly piqued, with this year's 3-D printing area at CES constantly packed with adoring fans. While this technology is already well-integrated into several manufacturing processes on the industrial side however, the problem is that it's really unknown how big this can be with consumers, at least in the near to mid term. In this segment, Pogue gives his viewpoint on when, if ever, 3-D printers will become a useful part of consumers' homes.

Pfizer will release its quarterly report on Tuesday, and it has seen its stock perform extremely well over the past quarter, hitting levels not seen in almost a decade. Yet even as competition against Merck , AbbVie , and other big pharmaceutical companies starts to heat up, Pfizer is contemplating some big strategic moves that could change the way it does business in the future.

Like many of its peers, Pfizer has had to deal with an extreme patent cliff in recent years. That has forced the company to look in new directions to develop potential replacements for blockbuster drugs that have lost patent protection. Fortunately, Pfizer has had considerable success in those efforts, but investors still question whether they'll be enough to hold Merck, AbbVie, and dozens of other competitors at bay. Let's take an early look at what's been happening with Pfizer over the past quarter and what we're likely to see in its report.

Source: Wikimedia Commons.

Stats on Pfizer

Source: Yahoo! Finance.

What's next for Pfizer earnings?
In recent months, analysts have gotten a little less certain about Pfizer earnings, cutting fourth-quarter estimates by a penny per share and full-year 2014 projections by $0.03 per share. The stock has come off its highs and has been essentially flat since late October.

Pfizer's third-quarter earnings report shows the extent to which the pharma giant has gone to support its profitability despite key patent-cliff revenue losses. Extensive cost-cutting paid off with a modest earnings beat, and even though sales of off-patent Lipitor fell substantially, patent-protected drugs like Lyrica and Celebrex posted solid gains. More encouragingly, cancer-drug sales jumped 24%, with lung-cancer treatment Xalkori seeing sales almost double and kidney-cancer drug Inlyta almost tripling its sales. Yet even with those results, Pfizer cut its guidance for the full year.

One problem that Pfizer has had lately is that new drugs have had slower launches than the company had hoped. For instance, with rheumatoid arthritis drug Xeljanz, Pfizer faces competition from AbbVie's Humira, even though Humira is injected while patients take Xeljanz in pill form. Similar issues have plagued its more recent Eliquis launch from late 2012.

Patent-cliff issues will also still face Pfizer in the future. Last month, the company settled a dispute with Teva Pharmaceutical by allowing the generic drugmaker to make a version of its key Viagra drug beginning in late 2017. The agreement will pay Pfizer an undisclosed amount for the rights, but it could also end up hurting Pfizer's branded Viagra sales when the Teva version becomes available almost two and a half years before Viagra's 2020 expiration of U.S. patent exclusivity.

One issue investors are following is whether Pfizer will take further steps to restructure its business. With plans to split up its commercial operations to separate generics from branded drugs, some believe that Pfizer will eventually spin off or sell its generics unit to focus on proprietary drug development. That would be consistent both with its own past trend as well as those of many of its peers, with Johnson & Johnson being the obvious example as it considers the sale of its Ortho diagnostics unit to focus more on pharmaceuticals.

In the Pfizer earnings report, watch to see whether the drugmaker is able to boost sales growth of its key drug offerings. Moreover, if the company releases details about its future corporate strategy, it could make investors feel more comfortable about where the stock is headed both in the near future and for years to come.

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Earlier this week, The Wall Street Journal reported that Apple is releasing two new iPhones this year with larger screens, a 4.5-inch model and a 5-inch-plus model. While this wasn't exactly new information, it was more evidence from a reputable source that big iPhones are on the way. The report also said that Apple is "scrap[ping] the plastic exterior" used in the iPhone 5c. There has been no shortage of reports suggesting that the 5c doesn't sell well, and larger iPhones would target an even higher end of the market, so it makes sense that the company would use premium metal casings for these phones, rather than plastic like the 5c.

In this segment of Tech Teardown, Erin Kennedy discusses the two new rumored phones with Evan Niu, CFA, our tech and telecom bureau chief. Shares of Apple rallied on the news, which shows that investors are pretty excited about a larger iPhone. Evan tells investors why now is just the right time for the company to release a larger version of its iPhone, in order to stay competitive with Samsung.

Dividend stocks are an essential part of most investors' portfolios. But to get the best results, you need to pick the best dividend stocks you can find. How can you improve your chances of picking dividend winners?

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, goes through the three things to look for in strong dividend stocks. Dan notes that dividend yield is the first thing most investors look at and is in fact important, but counting too much on high-yielding stocks Frontier Communications and Windstream can create big risks. Dan suggests also looking at dividend growth, with well-known companies Procter & Gamble and Coca-Cola having made annual dividend increases for decades and delivering increasing amounts of income to shareholders over time. Finally, Dan talks about the payout ratio and comparing earnings to dividends to make sure a company isn't getting overextended in a way that could force it to make a dividend cut, as Cliffs Natural Resources did last year.

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Credit-card scam artists are continually coming up with new scams, while improving upon old ones. A major scam that's in the news these days is a seemingly innocuous $9.84 charge appearing on many people's credit card statements.

It may seem harmless and minor, but that's the point. The scam is perpetrated by those who have stolen great gobs of credit card numbers, and they're charging a modest sum on each one. (At Target alone, for example, tens of millions of customer accounts recently had data stolen, and Target is one of many such huge corporate victims.) The scammers are correctly thinking that most people won't notice, or won't bother contesting, such a small charge. If you see a false $9.84 charge, though, don't ignore it.

What to do
First off, remember that it's not just a $9.84 charge you need to look out for -- scammers might charge any small or large amount to your account fraudulently. If you find any false charge, contact the issuing bank or card company immediately. Ask that the charge be removed and a new card issued.

This can serve as a handy reminder, too, that when it comes to security, you should favor credit cards over debit cards, because regulations protecting you against fraud are stronger for credit cards than debit cards. Also, if you often buy things online or over the phone, handing out your credit card number in the process, only do business with reputable outfits. The FBI offers even more tips on avoiding credit card fraud.

Be proactive, too, checking not only your credit card statements but also your credit reports regularly.

Other scams
This is just one of many scams perpetrated upon a trusting public. The folks at scambusters.org found "phishing" and identity theft to be the biggest scam categories in 2013, followed by lottery and sweepstakes scams, where gullible people cough up dollars to collect their even bigger alleged winnings. Third on their list were fake online shopping sites, eager to take your credit card numbers and not send you the items that you believed you were ordering.

Another growing scam category is tax-related fraud. For example, scammers who have your Social Security number and name might be able to snag your tax refund before you do. And with that information, they might even be able to apply for credit cards in your name, using their own addresses.

A bit of good news is that credit card companies hate these scams, too, and once they notice patterns such as widespread $9.84 charges, they often take steps to prevent damage to customers and their own accounts. But they'll never control it all, so we all need to be smart and wary when dealing with credit -- and debit -- cards. 

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Truly monumental changes are in the works at tech giants Microsoft and Nokia . Or at least that's what we're led to believe. With Microsoft's massive $7.2 billion purchase of Nokia's handset business set to close in the coming months, Microsoft and Nokia are both supposed to be looking toward newer and brighter futures.

Both Microsoft and Nokia reported earnings this week. Sadly for this turnaround narrative, the results, especially from Nokia, paint a far bleaker picture than perhaps many realize. I know, I know -- I'm as surprised as you that Microsoft would throw good money after a bad acquisition. I guess there's a first time for everything, right?

Source: Microsoft.

However, the current struggles at Nokia highlight some very ugly truths for Microsoft going forward, as it vies to become relevant in the mobile market that's essentially passed Microsoft by.

Nokia's nightmarish numbers
Nokia's fourth-quarter earnings were truly dreadful. Perhaps most importantly, as far as Microsoft is concerned, is that things at Nokia's handset business appear to be going from bad to worse.

For starters, it's worth noting that Nokia began reporting its handset business as a discontinued operation now outside its core business. For the quarter, revenue from discontinued operations fell 29% from Q4 2012, and 4.5% from the third quarter of this year. Equally alarming, Nokia's handset shipments also came in well short of what had been expected, declining to 8.2 million shipments during the quarter versus 8.8 million in the third quarter.

For the quarter, Nokia's handset division saw its non-International Financial Reporting Standards operating margin decline 6 percentage points from the year before to -7.3%. Its handset business is bleeding money.

Put in proper context, it seems Nokia is getting a pretty sweet deal here, swapping what's by far its most challenged business for more than $7 billion of Microsoft's cash, while Microsoft is about to acquire a total mess of a business. That would be fine normally, as the tens of billions of dollars of cash Microsoft generates each quarter make botched acquisitions like this easy to weather.

However, Nokia's importance to Microsoft was arguably more strategic than financial. Microsoft had planned to use Nokia as the partner that helps drive what will be its glorious resurgence in the mobile space. But as we saw with Nokia's recent report, Microsoft's grand ambitions are likely crashing and burning in front of its very eyes.

Garbage in, garbage out
Since virtually all models involve a fair deal of assumptions, even the most sophisticated model can generate an outrageous outcome if it's based on unrealistic expectations. And in comparing Microsoft's ambitions for Nokia versus the current business realities at the Finnish smartphone maker, Microsoft's comeback plans are looking more and more like a pipe dream.

In the short term, the deal is almost assuredly going to be a money-loser for Microsoft. In its acquisition presentation, Microsoft estimated it would need to sell roughly 50 million Nokia smartphones to hit its operating income breakeven point. But in the full year Nokia reported on Thursday, it managed to sell only 30 million handsets. And especially with handset sales actually losing momentum in the fourth quarter -- traditionally the strongest quarter for smartphone sales -- it's hard to imagine how Microsoft will hit its breakeven point anytime in the near future. 

Source: Microsoft.

However, it gets worse when looking at the long term.

By 2018, Microsoft is targeting a 15% share of the global smartphone market, which, at that point, will have growth to 1.7 billion units. This means Microsoft believes it will be able to grow its smartphone sales to roughly 255 million units, or about Apple's market share, even as Nokia's handset sales are declining in the present.

Source: Microsoft.

In arriving at a final value for the deal, Microsoft estimates the Nokia handset deal will result in a net present value of between $15 billion and $30 billion. But again, this is predicated on Microsoft's achieving operating margins of 5% at the low end, and 10% at the high end. But again, remember, Nokia's handset business saw its operating margin decline meaningfully to 7.6% in its most recent quarter.

We're seeing a common thread emerge here -- that there's a gaping chasm between the current state of affairs at Nokia and what Microsoft believes it will be able to achieve with Nokia going forward.

A tall order indeed
Now, I'm all about being an optimistic, so forgive me for saying that this seems largely unachievable for Microsoft from where I'm sitting.

But it does.

Microsoft needed to make a bold move to demonstrate that it's serious about growing its presence in mobile. But from the look of things today, Microsoft will need to move far beyond just Nokia to achieve its desired 255 million shipments in five years' time.

In fact, it's been widely rumored that Microsoft has been in active discussions with other smartphone OEMs, such as Sony, Samsung, and many others, about possibly expanding their own portfolios of Windows-based smartphones in the year ahead.

However, as Microsoft prepares to bring Nokia's handset business under its corporate umbrella, it's looking more and more like a botched deal from the start. And that's something that should have Microsoft investors up in arms at the prospect of yet another botched billion-dollar buyout.

Apparently, history does repeat itself with Microsoft.

Well-known activist investor and billionaire Carl Icahn tweeted that he has now boosted his stake in Apple by $500 million to $3.6 billion, calling the company a no-brainer investment, and is continuing his fight for increased share buybacks. He has now issued an open letter, calling his fellow shareholders to arms. In his seven-page letter, he notes that the S&P 500 trades at a 71% premium to Apple, which he calls a "dramatic valuation disconnect." Icahn's annoyance with Apple's enormous cash hoard is obvious, but does his proposal make sense?

In this segment of Tech Teardown, Erin Kennedy discusses Carl Icahn and Apple with Evan Niu, CFA, our tech and telecom bureau chief. The number of Apple bears has been on the rise recently ever since the stock fell from its high in 2012 and lagged the market considerably in 2013, but Icahn has defended Apple's prospects. He believes the company's unrivaled customer loyalty will be the key to it maintaining pricing and margins going forward, and he's still bullish on Tim Cook's leadership. He also sees Apple getting into Ultra HD televisions, which he thinks could generate as much as $40 billion in revenue annually.

With Icahn having backed off from his initial call for $150 billion in buybacks and revising down to $50 billion, Evan sees that number as reasonable. He agrees that Apple does have too much cash on the books, and could see a $50 billion share repurchase before the end of the fiscal year in September as making sense.