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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Motley Fool: Learn your Alphabet

The tech giant Alphabet posted $136.8 billion in revenue last year, with $30.7 billion in profit. (Associated Press)

Alphabet (Nasdaq: GOOGL) (Nasdaq: GOOG), parent of Google, is an appealing candidate for your portfolio, with a huge defensive moat and investments in a range of promising businesses. The tech giant posted $136.8 billion in revenue last year, with $30.7 billion in profit.

While it has many moving parts, Alphabet is essentially an advertising company. With eight (mostly free) products that have at least 1 billion monthly users each (Google Search, YouTube, Gmail, Chrome, Maps, Android, the Google Play store and Google Drive), it can collect more data than any other organization in history. Alphabet can then use that data to offer targeted ads with great precision. Ads brought in $116 billion last year, or 85% of all revenue.

But wait – there’s more! The company’s financial statements regularly report on its “other bets” segment. These are experiments trying to substantially change the way we live; they include attempts at improving human longevity, connecting remote parts of the world to the internet and cybersecurity initiatives. But the big one right now is Waymo, Alphabet’s self-driving vehicle unit. Any of these businesses could be huge moneymakers in the future

What about rumblings that the U.S. government might break up Alphabet? Even if it does, the sum of the parts is worth a lot more than the company’s recent market value. (The Motley Fool owns shares of and has recommended Alphabet.)

Ask the Fool

Q: What’s the difference between a 401(k) plan and a 403(b) plan? – B.H., Port Charlotte, Florida

A: Both are tax-advantaged retirement plans, with 401(k)s targeting private-sector workers and 403(b)s primarily for employees of tax-exempt employers, such as educational institutions and some nonprofits. They have the same or similar contribution limits and both can be offered in traditional and Roth form. (Traditional plans feature upfront tax breaks, while Roth plans permit tax-free withdrawals in retirement.)

Both can provide matching employee contributions to some degree, but matches are more common with 401(k)s. If your plan matches contributions, be sure to grab all the matching funds you can – that’s free money. Employer contributions may take several years to fully vest, but 403(b) plans are more likely to feature quicker or immediate vesting. In both cases, employee contributions are fully vested immediately.

Many 401(k) plans are administered by mutual fund companies, while insurance companies frequently administer 403(b)s. Thus, 401(k) investment menus routinely feature mutual funds, while 403(b)s often feature annuities along with funds.

Learn more at, at, and by trying our “Rule Your Retirement” service at

Q: What are some unusual ticker symbols? – F.T., Honolulu

A: Lots of ticker symbols are clever. For example: Southwest Airlines (LUV); 3M (MMM); Yum! Brands (YUM), the parent of KFC, Taco Bell and Pizza Hut; Brinker International (EAT), the parent of Chili’s; explosives maker DMC Global (BOOM); Molson Coors Brewing (TAP); Gibraltar Industries (ROCK); National Beverage (FIZZ); Heineken (HEINY); Sotheby’s (BID); Olympic Steel (ZEUS); and amusement park company Cedar Fair (FUN).

Before they were bought out, eyewear maker Oakley sported the symbol OO and mattress maker Sealy had ZZ.

My dumbest investment

My dumbest investment was years ago, in 1986. Microsoft had its initial public offering (IPO), and … I didn’t buy any shares.

What was my problem? Well, that’s the problem – I wasn’t thinking. At the time, I was learning to service mainframe computers. Someone suggested that I invest in Microsoft shares because “most homes will have a computer in them by the year 2000.” I chuckled and wondered what they were smoking. As you can tell, I lost out on a lot of money. – R.F., online

The Fool responds: We’ve all missed such opportunities – but they weren’t no-brainer investments back then.

In 1986, Microsoft had been around for more than a decade and was quite successful, but it was still a shadow of what it would become. Annual revenue was less than $200 million; today it’s more than $125 billion. The company’s market value at the time of its IPO was under $800 million, and today it’s often above $1 trillion.

It’s sensible to pass on an investment opportunity when you don’t have confidence in the company’s future. It’s usually best to steer clear of IPOs, too, as they can be especially volatile; instead, wait a year or so for shares to settle down. If you’re simply torn about whether to invest, consider investing a smaller sum as a compromise. If the company continues to perform well, you can buy more.