Confidence Drops as Investors Worry About the Future

A rocky January for stocks may be harbinger of a tough year.

Jan 31, 2014 at 12:00PM

There's an awful lot of red on the Dow Jones Industrial Average (DJINDICES:^DJI), which is down 110 points at noon EST. Disappointing news from the likes of Wal-Mart, which cut its fourth-quarter earnings forecast, and MasterCard (NYSE:MA), which missed analysts' estimates for the fourth quarter, are clearly upsetting investors. Also instilling fear into the markets is the concern about whether January's rocky start for stocks is a predictor of a market correction for 2014 .

The Thomson Reuters/University of Michigan consumer sentiment indicator showed some improvement at the end of January, clocking in at 81.2 compared to the reading of 80.4 a couple of weeks ago. Overall, though, sentiment has fallen from the more hopeful 82.5 seen at the end of December.

The Bureau of Economic Analysis  weighed in with news about personal income and outlays for December, showing that consumers increased spending by 0.4%, better than the expected 0.2%. Personal income remained stagnant, however, with no change in December from the previous month.

MasterCard disappoints
Payments giant MasterCard is down 4.5% as it reported fourth-quarter earnings one day after rival Visa (NYSE:V). The company missed estimates on earnings per share by $0.03, and revenue estimates by $20 million, but there was still plenty of good news on tap.

Revenue increased 11.6% year over year, with a 14% rise in gross dollar volume and an increase in transactions of 13%. This latter metric mimics Visa's transaction volume of 13%, which is nothing to sneeze at. One issue that may trouble investors might be that MasterCard's operating expenses increased 11% year over year, due to higher marketing expenses; the company also noted increased expenses due to higher rebates and incentives. Visa's expenses rose by only 3% during the same time period.

Both companies repurchased stock during the last quarter of 2013. Visa repurchased 5.5 million shares, for a total of $1.1 billion, and MasterCard bought back 9.8 million of its common shares, for a total of $751 million.

The secret to a secure retirement

As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends MasterCard and Visa. The Motley Fool owns shares of MasterCard and Visa. 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.

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