Today’s 3 Worst Stocks in the S&P 500

A retailer, a railroad, and a regular financial titan end as the three worst performers in the stock market today

Jan 16, 2014 at 7:09PM

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.

We're just a few weeks into the New Year, which means most investors' visions of market-beating 2014 returns remain firmly intact and distinctly possible. The beginning of each calendar year routinely inspires hopes, goals, and dreams far beyond the field of finance. While some people realize that a few weeks of football-induced gluttony makes their weight-loss goals much harder to accomplish, others are now starting to see the stock market eat away at their returns. That's because it's the beginning of earnings season, and no matter what the economy's like, individual stocks are more prone to volatility than usual. After reaching an all-time closing high yesterday, the S&P 500 Index (SNPINDEX:^GSPC) lost two points Thursday, or 0.1%, to end at 1,845.

Steadfast believers in Best Buy (NYSE:BBY) stock paid dearly for their faith today, as shares cratered 28.6%, a staggering daily loss rarely seen by shares in S&P 500 members. The electronics retailer shocked Wall Street by whiffing entirely on same-store sales numbers during the holidays, which fell nearly 1% from the year before. Not only did Best Buy have to lower fourth-quarter earnings guidance in the face of this, but it casts serious doubt on the turnaround narrative that drove shares to more than triple last year. I'm as shocked by the letdown as much as the rest of the market was today, but my colleague Rick Munarriz claims he saw ominous signs before today.

While CSX (NYSE:CSX) stock, in comparison to Best Buy, looks like nothing more than a bump in the road, Thursday's 6.8% haircut is still nothing to take lightly. Though big losses early in the year certainly make it all the more difficult to catch up with the broader market by year's end, a time horizon of 12 months to achieve your financial goals is hardly a reasonable measure of success. Railroad company CSX is a fine example of a business facing short-term headwinds (falling coal shipments, huge one-time gains that make immediate earnings growth difficult), but remains poised for long-term success.

Finally, shares of Citigroup (NYSE:C) dipped 4.4% today, despite financial statements that read like a hardcore capitalist erotic novel. Citigroup more than doubled its earnings from the same quarter in 2012, pulling in $2.7 billion. In other words, Citigroup made more money in the last three months of 2013 than the entire GDP of Lesotho in 2012 -- and Wall Street expected better. With consumer credit improving, and a global economic recovery under way, Citigroup looks primed to continue pulling in more money each quarter than the annual GDP of entire nations, although there's no guarantee investors will like it.

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Fool contributor John Divine has no position in any stocks mentioned. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.

The Motley Fool owns shares of Citigroup and CSX. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

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