Dow Notches All-Time High; DryShips Soars

Disney and Sears both end the day in the red as stocks tread water.

Jun 10, 2014 at 6:23PM

Edging higher for a fifth straight day, the Dow Jones Industrial Average (DJINDICES:^DJI) notched a record closing high yet again on Tuesday. Flirting with breakeven levels for most of the day, the blue chip index didn't get much help from Walt Disney (NYSE:DIS) shares, which nearly finished as the worst performing stock in the Dow. The Dow itself tacked on just 2 points, ending at 16,945.

Disney shares gave up nearly all of yesterday's gains, losing 0.9% on Tuesday. Today's losses come despite little news regarding the company, although perhaps the fact that it was a slow news day caused investors to get jittery about things they would normally write off. It appears hedge fund all-star Andreas Halvorsen's Viking Global fund divested from Disney stock in the first quarter, according to SEC filings. Long-term investors shouldn't fret, though -- hedge funds don't think in terms of long-term value, they think quarterly. Viking Global, for example, bought Disney's stock less than a year ago. Such short-term strategies lean closer to gambling than investing.

Sears Holdings (NASDAQ:SHLD) shed 2.3% today. Over the last several years, shareholders have learned to accept such intraday losses -- or have sold out themselves -- without blinking an eye. The decline of Sears, once a dominating force in retail and a familiar presence in malls across America, has been well-documented. As shoppers increasingly shifted their spending habits toward e-commerce, Sears failed to adapt, and the costs of brick-and-mortar selling weigh it down to this day. The trajectory of the business doesn't appeal to my investing style, but my colleague Michael Lewis argues that even if Sears goes bankrupt, the liquidation value of the company could surpass today's share price.

Dryships Homepage

Source: DryShips

Bankruptcy isn't something that DryShips (NASDAQ:DRYS) investors should worry about for the time being, even though the company isn't profitable at the moment. The Greek bulk shipper really dug itself out of a hole back in 2008 when it acquired a controlling interest in Ocean Rig, an offshore contract oil driller. While fortunes were certainly lost in the 2008-2009 crisis, times of turmoil are also when fortunes are made, and DryShips appears to have made a shrewd investment. Ocean Rig signed a six year contract last week for one of its rigs which will have an estimated $1.3 billion backlog. DryShips rallied 7.2% on Tuesday as drybulk shipping prices also increased.

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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.

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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."

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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." 

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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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