From the Desk of Irwin Michael – July 29, 2016 On July 28th, Alphabet reported an impressive quarter with strong revenue and profits. The company exceeded expectations with revenue growing 21% year-over-year as demand for online advertising continues to remain robust. The company experienced broad-based growth from Google Websites, Cloud and Other Bets. In a changing digital world, the company is doing an excellent job transitioning the business from desktop to mobile, with strong results in both mobile and video advertising. Furthermore, free cash flow is also accelerating and the company is continuing to deploy cash towards buying back shares. These results beat analyst expectations’, surprised the street, and emboldened investors’ subdued optimism. Alphabet’s core business is firing on all cylinders and we see continued growth ahead as it continues to be the premier search platform worldwide. More importantly, Alphabet along with the significant earnings beats of Apple, Microsoft and Amazon, is starting to reverse both analysts’ and investors’ pessimistic and skeptical expectations of these mega corporations. For instance, Apple, which is held in all five ABC Funds, is extremely important for several other reasons: 1. Apple is a meaningful proxy for the overall US stock market as it is the largest holding in the S&P 500. 2. Apple is the top holding in the tech-heavy NASDAQ, and, as a result, should positively impact both chipmakers and software companies. 3. Investors and analysts became far too negative on Apple after the previous quarter when iPhone sales disappointed. Not only did the quarter prove that the negativity was overdone, but also, these results could be an important catalyst to turn investor sentiment upwards. Irwin A. Michael, President I.A. Michael Investment Counsel Ltd.