Volatility, You're Back! Home Depot, Netflix, and Vringo, Inc. Slide

The Dow also loses ground as a dose of chaos returns to the stock market today.

May 6, 2014 at 6:14PM

The stock market is -- with the exception of quantum particle interactions and makeshift chemistry labs -- one of the most notoriously volatile things in the known universe. In the last week, however, major market indices have been humming along smoothly, logging a small loss here, a modest gain there. In fact, the first third of 2014 has taken investors on a rather dull, calm ride -- and it isn't just the stock market. Stocks, bonds, and currencies, through the end of April, are each experiencing a dearth of volatility not seen in the prior five years. But such a smooth journey can't go on forever, and stocks showed their penchant for big swings once again on Tuesday as the Dow Jones Industrial Average (DJINDICES:^DJI) tumbled 129 points, or 0.8%, to end at 16,401. 

Home Depot (NYSE:HD) helped propel the Dow lower -- Tuesday was its first triple-digit move in more than a week -- as shares shed 1.6% in trading. Today's stumble was hastened by new data, which reveal that home prices aren't rising as rapidly as investors had hoped, a softness in the real estate market that could dent Home Depot's business if the trend continues. CoreLogic's Home Price Index advanced at an 11.1% year-over-year pace in March, more than 1% shy of February's 12.2% annual gains. Considering how harsh this winter was, it's especially disappointing that prices didn't jump a little higher when March rolled around.

Vringo (NASDAQ:VRNG) shareholders can identify with being "especially disappointed" today, as the stock tumbled 9.2% in trading. Vringo is an unusual stock because the underlying company doesn't rely on that old-fashioned business model of providing goods and services to earn its keep. Put simply, Vringo is what some people might term a "patent troll." Vringo "is engaged in the innovation, development and monetization of intellectual property and mobile technologies," a strategy that boils down to acquiring intellectual property and then either licensing it out or suing the pants off anyone that infringes upon it. A 2012 ruling against Google for $30.5 million is now being challenged by the search giant, in a move that puts a serious damper on Vringo's prospects. Vringo has less than $3 million in revenue in its last five fiscal years combined. 


"Orange is the New Black" returns on June 6. Source: Netflix

Lastly, shares of Netflix (NASDAQ:NFLX) tumbled 5.3% on Tuesday, as a number of high-growth stocks fizzled out. While fans of Netflix's hit original series "Orange is the New Black," can rejoice upon hearing that the show's already been greenlit for a third season, major concerns still loom surrounding the company's business model. Netflix shelled out an undisclosed sum to Internet service provider Comcast earlier this year to ensure that its video content would reach subscribers without a hitch. The agreement was a blow to the ideal of net neutrality -- in which all Internet traffic is treated equally by broadband providers -- and could set a costly precedent for Netflix down the line.

Your cable company is scared, but you can get rich
You know cable's going away. Cable knows 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 Apple, Google (A and C shares), Home Depot, and Netflix and owns shares of 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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