What Uber Means for the Stock Market, and How to Trade the Next IPO Like Warren Buffett

The headlines were brutal. St least some of them were. Gizmodo exclaimed, “Congratulations to Uber, the Worst Performing IPO in U.S. Stock Market History.” The story explained that trading had not gone as expected for the ride hailing service. Uber “finally debuted on the New York Stock Exchange today, in the middle of international trade uncertainty and following a massive, international strike by its own drivers, how’d it do? According to University of Florida professor Jay Ritter, Uber’s 7.62 percent decline since hitting the NYSE makes it “bigger than first day dollar losses of any prior IPO in the U.S.” In ...
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Key Takeaways From the Berkshire Hathaway Annual Meeting

While investors typically have a passive role in their investments, they do get to weigh in once a year during a company annual meeting. Usually, that’s a boring affair, laden with Wall-Street speak and accounting terms designed to make eyes glaze over. But there’s one huge exception: the annual meeting of Berkshire Hathaway (BRK-A). The meeting makes Omaha the ultimate travel destination in the first week in May for any investor. It’s a circus with all sorts of booths, attractions, and resembles a bit of a country fair or circus as much as a corporate business meeting. And while corporate matters are ...
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Tesla Turns to the Markets But It Might Not Help in the Long Run

Tesla (Nasdaq: TSLA) recently announced that it would sell about $2 billion in stock and bonds to help fund its operations after a worse than expected first quarter. Regulatory filings show Tesla plans to raise between $2 billion and $2.3 billion, consisting of $1.35 billion to $1.55 billion in five-year convertible senior notes (debt with a low interest rate of 1.5%-2% that can be converted to stock if the share price rises roughly 30%), plus $650 million to $750 million of common stock. There is little chance of failure since the deal is being managed by Goldman Sachs, Citigroup, Morgan Stanley, ...
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Crisis Investing 101: Buy During Panics

There’s an old investment adage to buy when things look dour. While that sounds great in theory, human psychology makes it difficult. Even thinking about investing in a stock that’s been declining—or has been making news headlines for a defective product—tends to put our caveman brain into flight mode and avoid it all together. But a pause to think more rationally is where the opportunity arises to beat the market. Recognizing that a company is out of favor for short-term reasons, we can then look a bit further down the line. If that company can solve the problem before it goes ...
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Traders Shrug Off Facebook’s $5 Billion Fine

It was a story buried in the hard copy of The New York Times, on page B6 with the headline “Bank Agrees to Settle Mortgage Crisis Claims.” It could have been written in 2009, or 2010. But it is more recent than that, appearing just last week: “More than a decade after the mortgage crisis blew a hole in the United States economy, banks and prosecutors are still sorting out the tab for the damage. The latest reckoning came on Thursday, when Morgan Stanley agreed to pay $150 million to settle claims by the State of California that it misled investors ...
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Find the Toll Bridge Investment for this High-Tech Sector

One simple way to find excellent investment prospects is to look for a company that’s the equivalent of a toll bridge spanning a river. If someone wants to cross, they have to pay a toll. The alternative may be to go to another point, costing time and distance far in excess of the toll. These “toll booth” opportunities tend to reward investors disproportionately thanks to this built-in advantage that they have. Nearly every investment sector can have a toll-bridge opportunity, if you know where to look. As news unfolds about the 5G network, and as companies position themselves with shifting alliances like something ...
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Don’t Make These IPO and Trading Mistakes

Trading is challenging and it’s difficult enough to succeed without facing additional problems created by mistakes. Yet, mistakes are possible and might even be common. For example, when there is an initial public offering (IPO) of a hot stock, the mistake could be buying shares of the company. The IPO of Lyft (Nasdaq: LYFT) demonstrates that the initial buyers of a stock could suffer quick losses. There is no assurance of a rapid rebound in these stocks. Snap (NYSE: SNAP) and Twitter (NYSE: TWTR), for example, are both below the IPO prices years after their IPOs. But there are other mistakes ...
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Take a Fast Pass on Disney Shares at This Price

The Walt Disney Company is known for many things—Mickey Mouse, princesses, world-class theme parks. Its more recent acquisitions into Marvel, Pixar, and now Fox Entertainment make it a great company. But a great company doesn’t always mean it’s trading at a great price for investors. That’s the case right now. Shares of the media conglomerate surged following the announcement of its new streaming service, Disney+. With a huge entertainment catalogue and a starting price point of $7 per month, the company will be going head-to-head with the lowest-cost streaming services, some of which still interrupt their shows with advertising. While the move is a ...
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