Rite Aid Rally Rages On; J.C. Penney's Silence Sparks Selloff

Dow gives up some of Tuesday's gains as Disney slips in the stock market today.

Jan 8, 2014 at 6:31PM

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.

Just after the first truly bullish day of 2014, the stock market pulled back again today, with the Dow Jones Industrial Average (DJINDICES:^DJI) erased most of yesterday's 105-point gains. The much-awaited minutes from the Federal Reserve's December policy meeting showed that most of the central bank's leaders supported the decision to curb bond-buying to the tune of $10 billion per month. Meanwhile, a more tangible phenomenon is temporarily putting strains on the U.S. economy: weather. The "polar vortex" will likely cost the U.S. economy billions of dollars as the extreme weather seen in dozens of states slows transportation. The Dow ended down 68 points, or 0.4%, to close at 16,462. 

Walt Disney (NYSE:DIS) stock finished as one of Wednesday's 20 blue-chip decliners, shedding 1.5% in trading. Media mogul and all-around intimidating old man Barry Diller continues to be a major thorn in Disney's side. Diller's Aereo, which provides TV on the Web, just raised another $34 million from private investors as it continues to boldly execute its highly controversial business model. If Aero is legally able to provide live and previously recorded TV to its subscribers via Internet-enabled devices Disney, as well as many other broadcasters, will be furious. (Aereo doesn't pay the broadcasters for the right to retransmit their programming.) Has the day come where Hannah Montana is more controversial than Miley Cyrus?

Elsewhere, J.C. Penney (NYSE:JCP) stock ended as a big loser again, cratering 10% to bring its five-day losses to 19.5%. What sort of horrific news could be responsible for a slide like that? Insider selling? Cooking the books? An expensive Christmas party? In fact, J.C. Penney shares have been slumping because it's kept mum on holiday sales numbers. That's right, folks. Wall Street will sometimes whip you just for shutting your mouth. The department store's press release this morning, in which the company reiterated its fourth quarter guidance and noted how it was "pleased" with its holiday performance, lacked the flamboyant exuberance and, more importantly, the solid numbers investors were looking for. All joking aside, the company's silence is somewhat disconcerting, since most public companies can't wait to share good news with the world.

Finally, Rite Aid (NYSE:RAD) stock continued its fairytale run, tacking on 6.4% today. Shares of the drugstore have more than quadrupled in the last year and are up 11% already this year. Wednesday's boost came from JPMorgan Chase, which cited the success of Rite Aid's loyalty program as well as new generic drugs and an increase in the number of insured Americans as catalysts going forward.

The $2.2 trillion war for your living room begins now
The Aereo-Disney dispute is just a sliver of history unfolding before our eyes as the way we consume media changes. You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple.

John Divine owns shares of Apple and Google and is long January 2015 $10 calls on J.C. Penney. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.

The Motley Fool recommends and owns shares of Apple, Google, Netflix, and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information

Compare Brokers