Dow Craters 166 Points but Potbelly Refuses to Fall

Home Depot leads the blue chips lower, while MGM Resorts ends as one of the worst in the stock market today.

Apr 7, 2014 at 6:35PM

The three major U.S. indices and all 10 sectors ended in the dumps on Monday, as the stock market lost ground for a third straight session. Though seven in 10 stocks lost ground, today's sell-off was especially rough for high-growth names: only one of the S&P's 20 hottest performers of the last year eked out gains Monday. With bears threatening to come out of hibernation in the early days of spring, the Dow Jones Industrial Average (DJINDICES:^DJI) lost 166 points, or 1%, to end at 16,245. 

Home Depot (NYSE:HD) finished as one of the day's 23 blue-chip laggards, losing 2% by day's end. Remember: high-flying stocks took the brunt of the impact from today's sell-off, and in the last three years Home Depot stock has doubled, performing nearly three times as well as the Dow itself. Shares are somewhat insulated from severe declines with $15 billion cash in the bank and a sustainable, 2.4% dividend to its name. Consider the fact that real estate is still on the up-and-up and homeowners are remodel-happy, and Home Depot still looks like a good bet. 

While investors have been diligently bidding Home Depot's stock to double what it was three years ago, shareholders of MGM Resorts International (NYSE:MGM) weren't as patient -- its stock has doubled in the last year alone. But the quick to rise are too often quick to fall, and Monday's risk-shedding party sent MGM stock plunging 5.9%. The rationale behind today's slump is almost laughable from the outside: gambling revenue in Macau over a seven-day span was disappointing, mostly because of lousy weather. A bum week of sales should hardly mean an $11 billion gambling mainstay is suddenly 6% less valuable, and if shares are prone to fall off a cliff every time the weather isn't predictable, that shows you just how fragile MGM stock can be.

Lastly, shares of the fast-casual sandwich chain Potbelly (NASDAQ:PBPB) added 1% today, as it bucked Monday's downtrend to finish in the black. It's one of the few times in the stock's short history as a public company that Potbelly shares have done anything other helplessly slump. The stock's heyday was way back in October of 2013, when shares went public at $14 a share, then broke $30 a share by the end of the day. Ever since then shares have been pitifully tumbling back toward their original levels. Frankly, since Potbelly's is still unprofitable and growing its sales by less than 10% annually as of 2013, I'm more excited by their sandwiches than their stock.

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

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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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