Tech Gets Crushed and Markets Drop to End the Week

The Dow Jones Industrial Average is down, but the Nasdaq is really hurting today as investors get uneasy about tech.

Apr 4, 2014 at 3:30PM

The Labor Department's latest jobs report clearly did little to inspire buyers on Wall Street today, as all three major U.S. stock indices have hit the skids in afternoon trading. The U.S. economy added 192,000 jobs in March, not far from the 200,000 that economists had anticipated. The unemployment rate remained frozen at 6.7%.  

The Dow Jones Industrial Average (DJINDICES:^DJI) began the day higher but then fell steadily, landing 129 points, or 0.8%, lower at 3:30 p.m. EDT. Surprisingly, the Nasdaq dropped 2.3% as a broad sell-off hit tech stocks heading into the weekend.

Tech tumbles
Leading the Dow lower was Microsoft (NASDAQ:MSFT) and Cisco (NASDAQ:CSCO), which were down 2.3% and 1.6%, respectively. Neither company is facing any real negative news, and the market has actually been excited about Microsoft's free mobile operating system strategy and Cisco's move into the cloud. But a sell-off like this one drags everything down, even when surrounding news appears to be positive.

It's days like today, when stocks are falling for seemingly no reason, that we need to step back and look at where our investments stand. Despite being slow-growth companies, Microsoft and Cisco have both outpaced the Dow this year.

MSFT Total Return Price Chart

MSFT Total Return Price data by YCharts.

After a year when growth stocks with little profit were the big winners on the market, 2014 is shaping up to be a year for stalwarts that generate consistent cash flow. These companies fit the bill and are still giving investors good value.

Microsoft trades at 15 times earnings, pays a 2.7% dividend yield, and has over $77 billion in cash on hand. Cisco also has a 15 P/E ratio, pays a 3.4% dividend yield, and has over $50 billion in cash.

At a time when it's tough to find value on the market, crazy sell-offs like today's should be seen as buying opportunities for these stocks.

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Travis Hoium manages an account that owns shares of Cisco Systems. The Motley Fool recommends Cisco Systems. The Motley Fool owns shares of Microsoft. 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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