1 Innovative, Profitable Company = An Endless Spawn of Competition

Netflix's first-mover advantage is being threatened by the likes of Amazon.com, Hulu, and even AOL. Home Depot sends the Dow lower as home sales fall.

Apr 23, 2014 at 6:20PM

It was back to reality for the stock market today, as the Dow Jones Industrial Average (DJINDICES:^DJI) ended in the red after shockingly weak real estate numbers put investors on edge. Econoday was hoping for annualized new home sales between 440,000 and 470,000 in March. Unfortunately Econoday set its sights too high, and new home sales plunged, falling 14.5% from the year before to an annualized pace of 384,000. Thankfully, last month's soft sales are largely indicative of booming real estate prices, which have soared 12.6% in the last year. A choppy session of trading ended with the Dow down 12 points, or 0.1%, to end at 16,501. 

Home Depot (NYSE:HD) shareholders, naturally, had no reason to applaud today's pitiful housing numbers. So they didn't. Instead investors sold off Home Depot stock to the tune of 1.4%, making it one of the Dow's worst performers of the day. While the daily ups-and-downs of individual stocks don't always (or often, even) happen for good reason, I think the softening of the real estate market is a very real risk for Home Depot investors. All signs point to interest rates remaining low indefinitely, but that doesn't mean home sales will keep chugging along if prices are going bonkers as well. Since home remodeling projects would likely suffer with falling home sales, Home Depot's bread and butter business would also take a hit. Let's hope last month's new home sales were just a fluke, then!


Tony's back. On Amazon. Source: Amazon.com

If there's one thing that's not a fluke, it's Netflix (NASDAQ:NFLX) and its absurd popularity. The streaming video service has more than 44 million customers in 41 countries, and numbers don't lie. Though shares shed 5.2% today, Netflix investors probably weren't heading for the exits because a few realtors went without their commissions in March. Netflix has so completely dominated such a lucrative industry for so long that competitors are beginning to pop up like whack-a-moles in theme parks. 

Amazon.com (NASDAQ:AMZN), which fell 1.4%, just announced an unprecedented deal to license content from HBO. That's right, HBO is licensing its content for web streaming -- a first for the legendary network. Amazon Prime members will have access to select, older HBO content, like "The Wire," "The Sopranos," and "Six Feet Under," among others. This helps justify Amazon's recent price hike for Prime members from $79 a year to $99/year. AOL also hopped on the streaming bandwagon today, saying it will feature Miramax films on its "AOL On Network" online channel.

This is getting to be one crowded stream, folks.

Your cable company is scared, but you can get rich
You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple


John Divine owns shares of Apple and Google (C shares). You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.

The Motley Fool recommends Amazon.com, Apple, Google (A and C shares), Home Depot, and Netflix and owns shares of Amazon.com, Apple, Google (A and C shares), and Netflix. Try any of our Foolish newsletter services free for 30 days. 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.

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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