The Dow Slips 167 Points to Start an IPO- and Earnings-Filled Week

Good evening, good lookin'. Here are the three things you need to know on April 8.

Apr 7, 2014 at 11:00PM

After falling Friday following the March jobs report, the Dow Jones Industrial Average (DJINDICES:^DJI) continued to slide 167 points Monday as investors lower their expectations ahead of the first-quarter earnings season.

1. Tech stocks keep getting slammed
March and April have not been kind to tech stocks. Since reaching all-time highs in early March on tech-mania excitement, things have been downhill for (NASDAQ:AMZN) and Facebook (NASDAQ:FB). Both of those same stocks have plummeted by over 14%. You name a young tech stock, and there's a good chance it's down 10% in the past month. 

On the other hand, mature tech stocks that pay quarterly dividends in order to give cash to shareholders have done well in the same period. Grandpa's favorite tech stocks -- like Microsoft, IBM, and Hewlett-Packard -- are all up over 3% the past month.

Investors like money, and young tech stocks offer imaginary future money (and trendy apps). Instead of giving profits to shareholders (i.e., dividends) Facebook and are making crazy purchases and investments ($19 billion WhatsApp acquisitions and supposed delivery drones). The market's punishment of tech's young growth stocks may signal a desire by investors for safer bets that don't require such faith in future payouts. 

2. Coffee prices surge on Brazilian weather
Your morning routine is about to get a tad more expensive. Forecasts for more dry weather in the coffee belt of Brazil, the world's largest grower and exporter of coffee beans, sent coffee prices soaring -- Arabica bean prices are up almost 11% since Thursday, their biggest two-day jump in two months.

It's all about Arabica beans. Forget what your hipster barista tells you about the coffee blends he makes from home in Brooklyn -- Arabica coffee enjoys high demand worldwide for its mild flavor and gourmet intrigue. It just so happens that Brazil produces half the world's Arabica beans, and investors worry that a few more months of dropping supply caused by drought will continue to send prices up.

The takeaway is that the report released from the National Coffee Council on Monday didn't taste great. The past two months were the driest in Brazil in 30 years, and obnoxious coffee connoisseurs know that you need moisture to mature coffee cherries. Arabica prices were already up 75% so far this year, but now the council is already lowering its 2014 production estimates from 44 million 60-kilogram bags to 40.1 million. Someone get us an alcoholic drink instead. 

3. IPOs and quarterly earnings reports ahead this week
Bring on the IPOs. Investors are gearing up for another exciting week on the floor. Untested virgin shares will experience the bop and bounce of stock market trading for the first time this week. Fourteen companies are expected to sell shares to the public markets for the first time in their initial public offerings, including sexy names like ... an auto lending bank and a cheap hotel chain. 

Don't let the bland names fool you -- the IPOs should be a thrill. The U.S. government bailed out automotive lending company Ally Financial, and it's ready to dump this annoying investment out of the public taxpayers' hands. La Quinta hotels is also ready to "check in" to the public domain by raising funds on the public stock markets.

Don't forget Alcoa's (NYSE:AA) kick-off party as it unofficially brings in the first-quarter earnings season Tuesday. The steel company will report what it earned in the first three months of 2014, the first of many companies that will have Wall Street's attention the next weeks. Analysts are actually expecting a drop in profits compared with last year, as the economy seems to be searching for its way (or batteries for the GPS, at least).


  • National Federation of Independent Business' Small Business Index
  • First-quarter rernings reports: Alcoa

MarketSnacks Fact of the Day: While "drip coffee" maker sales have stagnated, "coffee pod" machine sales have grown by 6 times in the past six years, with over 12 million units sold in the U.S. last year.

As originally published on

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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.

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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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