Editor’s note: The headline of this story has been updated to correct the spelling of Warren Buffett’s name.
Billionaire investor and investment guru Warren Buffett once shared the thumb rule he uses when to give up on a stock and in the process explained why investors are better off than business tycoons such as Andrew Carnegie or John Rockefeller.
What Happened: “I love it when the things we buy go down,” said Buffett in a 2014 Fortune Magazine interview. He said he would get “euphoric when the stocks are down because he can buy more of something he owned. On the other hand, with their stocks, people think the stock knows more than they do, he said.
“When the stock goes down, they say the stock is telling them something… and what it’s telling me is I can get more for my money,” the Berkshire Hathaway CEO said. But they take it as a kind of referendum on themselves and make it as a “me versus stock” and say if they get back what they paid, they are going to sell the stock irrespective of what they paid, he said.
“Stock doesn’t care what you paid; you have to remember the stock doesn’t even care that you own it; you are nothing to the stock; that stock is everything to you,” Buffett said.
The only question with every stock, every day is to look into “Can I get more for my money someplace else,” he said, adding that investors get a chance to be in thousands and thousands of great businesses and their prices change all the time and so do their relative valuation.
Since an investor can make the exchange at a very low cost these days, either with low commissions or nothing, they can always shift from one business to another, Buffett said. Investors have an advantage over Carnegie, who was in the steel business or Rockefeller who was in the oil business, he said. The billionaire said these businessmen couldn’t immediately shift to something like retailing or rearrange their business empire as an investor can with the portfolio they owned. The portfolio can be rearranged at a moment’s notice with practically no cost, he said, adding that this is a huge advantage.
“There is nothing about the price action of the stock that tells you whether you should keep owning; what tells you whether you should keep owning it is what you expect the company to do in the future versus the price at which it’s selling now compared to the other opportunities of businesses you think you know equally well and make that same comparison and that’s all there is to owning stocks,” Buffett said.
Why It’s Important: Buffett swears by an investment philosophy called value investing, which advocates picking stocks that appear to be trading for less than their intrinsic or book value. He has been very successful with the strategy and the success of Berkshire is a testament to it. The company, which owns holding companies primarily in the insurance and transportation businesses, as well as portfolio stocks, is now the eighth most valued global corporation, standing head-on-head with tech stocks.
Amid the current economic uncertainty, Buffett has shown a preference for accumulating a huge cash pile. At the end of the second quarter, the company had a massive cash pile of $277 billion.
Amid the hype surrounding Tesla, Inc. (NASDAQ:TSLA) investor and fund manager Gary Black on Sunday delved into whether the electric vehicle maker’s full self-driving technology is worth all the hype surrounding it.
What Happened: Black is convinced about the technology’s potential. “No one disagrees that fully autonomous vehicles are the future of the auto industry,” the fund manager said in a post on X, formerly Twitter. He, however, doesn’t think FSD is a zero-sum game.
“The debate has always been whether there will be 1 automaker ( $tsla) that solves general autonomy, or 10 or 20,” Black said. He noted that China’s Baidu, Inc. (NASDAQ:BIDU) already has 500 robotaxis in service, with 50% of its fleet capable of being driven autonomously.
Baidu’s fleet has provided 6 million rides to paying customers, he noted.
“In the history of the auto industry, every successful technological innovation has been quickly copied by everyone else. To say ‘this time is different’ seems naive,” Black said.
No one disagrees that fully autonomous vehicles are the future of the auto industry. The debate has always been whether there will be 1 auto maker ( $tsla) that solves general autonomy, or 10 or 20. $BIDU already has 500 robotaxis in service, 50% which drive fully autonomously,… https://t.co/YORmGm5mOm
Why It’s Important: While Tesla has predicated its future on FSD and robotaxis, Black is among the camps that believe in the potential of an affordable EV. Tesla diffused optimism regarding a sub-$30,000 EV by prioritizing robotaxis over it.
The company has scheduled robotaxi unveiling on Aug. 8 and more details on the fleet service will be made available then.
Tesla bull Cathie Wood’s Ark Invest, which has a $2,000 price target for Tesla by 2027, sees robotaxis accounting for 44% of revenue, 64% of EBITDA, and 67% of enterprise value by that timeframe. Elaborating on the potential, the firm said, “With access to 50x more driving data than Baidu and 280x more than Waymo, Tesla has a massive data advantage as it prepares to launch its robotaxi service, the largest AI project in the world.”
Tesla ended Friday’s session up 1.60% at $177.46, according to Benzinga Pro data.
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
Following Wednesday’s late surge that pushed the S&P 500 Index to a record high, the market sentiment has shifted to cautious. Stock futures on Thursday indicate a flat open on Thursday as traders likely seek to lock in profits before Friday’s release of the key personal consumption expenditure (PCE) data, the Federal Reserve’s preferred inflation gauge. However, it’s important to note the market is closed on Friday due to the Good Friday holiday.
Cues From Previous Session
U.S. stocks ended their three-day losing streak on Wednesday. The Dow Jones Industrial Average and the S&P 500 hovered near flat levels throughout the day. The technology sector displayed hesitation, with the Nasdaq Composite giving up early gains and fluctuating near the unchanged line until a late-session rally propelled it to a solid close.
The S&P 500 closed at a new record high but fell short of surpassing its intraday peak. Notably, all 11 S&P sector classifications finished positive, with real estate and utilities leading the gains.
Small-cap stocks displayed noteworthy outperformance, with the Russell 2,000 Index surging over 2% for the session. Commenting on this strength, Ryan Detrick of Carson Group said: “Historically cheap valuations, improving confidence, and strong EPS/revenue expectations (thanks to a healthy economy) are all other reasons we expect to see a big rally in ’24 from this area.”
Index
Performance (+/-)
Value
Nasdaq Composite
+0.51%
16,399.52
S&P 500 Index
+0.86%
5,248.49
Dow Industrials
+1.22%
39,760.08
Russell 2000
+2.13%
2,114.35
Insights From Analysts:
Not deterred by the extended runup, an analyst recommends staying invested in stocks. “The S&P 500 remains in a strong uptrend, supported by broad participation and cyclical leadership. While stocks are extended to the upside, this backdrop suggests pullbacks should be used as buying opportunities,” said LPL Financial’s Chief Technical Strategist Adam Turnquist.
“Improving relative strength in industrials, financials, and materials provides additional evidence of a bullish rotation that has largely been overshadowed by mega caps and AI enthusiasm,” he added. He noted that over 80% of the S&P 500 stocks traded above their 200-day moving averages and nearly one-fourth of the constituents closed at 52-week highs last week, marking the highest level since May 2021.
“Over the last 25 years, when the percentage of new 52-week highs crossed above the 20% threshold — as it did last week — forward three-month returns for the S&P 500 averaged 1.8%, with 74% of occurrences generating positive returns,” he said.
Turnquist said there could be further upside in April. “Election year lows are often set in Q1, while the S&P 500 has posted an average April return of 1.5% since 1950,” he noted.
Futures Today
Futures Performance OnThursday ( as of 7:15 a.m. EDT)
Futures
Performance (+/-)
Nasdaq 100
-0.04%
S&P 500
+0.03%
Dow
+0.01%
R2K
-0.02%
In premarket trading on Thursday, the SPDR S&P 500 ETF Trust (NYSE:SPY) edged down 0.03% to $523.02, and the Invesco QQQ ETF (NASDAQ:QQQ) slipped 0.04% to $444.64 according to Benzinga Pro data.
Upcoming Economic Data:
The Labor Department is scheduled to release its weekly jobless claims data at 8:30 a.m. Economists, on average, expect the number of individuals claiming unemployment benefits to come in at 214,000 in the week ended March 23, up from 210,000 in the previous week.
The Bureau of Economic Analysis is due to release the final first-quarter GDP estimate at 8:30 a.m. EDT. The GDP growth is expected to be left unrevised at the previously reported 3.2%.
The ISM-Chicago will release the results of the regional manufacturing survey at 9:45 a.m. EDT. The Chicago business barometer is expected to rise modestly from 44 in February to 45 in March. A reading below 50 suggests a contraction in activity.
The National Association of Realtors is due to report its pending home sales data at 10 a.m. EDT. The consensus estimate calls for a 1.0% month-over-month increase in the pending home sales index in February, reversing the 4.9% drop in January.
The University of Michigan is scheduled to release its final consumer sentiment reading for March at 10 a.m. EDT. The flash reading released earlier this month came in at 76.5, down from 76.9 in February. Traders may also focus on the inflation expectations readings of the report.
Specialty chemicals company Chemours Company (NYSE:CC) fell over 11% after the company disclosed revisions to past financials following an internal audit review.
Commodities, Bonds, and Global Equity Markets:
Crude oil futures rose over 1% to over $82 after Wednesday’s modest retreat. Gold futures last traded at $2,233.25 per troy ounce, up about a percent, just off the day’s high of $2,234.35. The yield on the benchmark 10-year Treasury remained around the 4.2% level.
Bitcoin (CRYPTO: BTC) was up modestly and traded around the $70,500 level. In Asia, market sentiment was mixed, with Japan’s Nikkei 225 pulling back sharply while the Singaporean, Indonesian, Malaysian, South Korean, and Taiwanese markets also retreated. The rest of the major markets rallied, led by Hong Kong.
European stocks traded slightly higher in early trading.
The market mood appears to have improved after Thursday’s inflation-induced sell-off, with stock futures rising modestly early Friday. Earnings news has been largely negative, potentially acting as a pushback. Bond yields are slipping as traders continue to harbor hopes that the Federal Reserve, led by Jerome Powell, would lean toward a dovish stance and signal rate cuts at the upcoming meetings.
Traders may also sift through a few key economic reports due for the day with an eye on the upcoming week’s Fed meeting.
Cues From Previous Session:
The much hotter-than-expected February producer price inflation report spooked traders on Thursday, with small-caps bearing the brunt of the selling. The weakness in the small-cap space could be explained by the fact that they are very sensitive to interest rates, given that the bulk of their financing would be in the form of bank loans.
The major averages opened higher but returned their gains immediately after and spent the rest of the session below the unchanged line. On a positive note, the key indices snapped back some of their losses in late trading before closing off the session’s lows.
The tech-Nasdaq Composite and the broader S&P 500 Index ended lower for a second straight session, pulling further away from their all-time highs.
Nine of the 11 S&P 500 sectors closed lower, with only energy and communication services stocks bucking the downtrend. Real-estate, financial, and utility stocks were among the worst decliners.
Index
Performance (+/-)
Value
Nasdaq Composite
-0.30%
16,128.53
S&P 500 Index
-0.29%
5,150.48
Dow Industrials
-0.35%
38,905.66
Russell 2000
-1.96%
2,031.18
Analyst Color:
Following Thursday’s “disastrous” PPI report, fund manager Louis Navellier said the Fed will unlikely cut interest rates until June or later. According to the fund manager, retail sales were underwhelming, pointing to lackluster GDP growth.
Despite the muted outlook, Navelier said the new market leadership remains intact. “AI hardware and weight loss drugs remain the strongest investment themes,” he said.
Futures Today
Futures Performance OnFriday ( as of 6: 45 a.m. EDT)
Futures
Performance (+/-)
Nasdaq 100
+0.29%
S&P 500
+0.25%
Dow
+0.13%
R2K
+0.25%
In premarket trading on Friday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.21% to $514.44, and the Invesco QQQ ETF (NASDAQ:QQQ) climbed 0.25% to $440.23, according to Benzinga Pro data.
Upcoming Economic Data:
The New York Fed is due to release the results of its Empire State manufacturing survey for March at 8:30 a.m. EDT. On average, economists expect the business conditions index to come in at -7, suggesting contracting activity. However, the index is likely to improve from the February reading of -2.4.
The Bureau of Labor Statistics will release its February import and export prices report at 8:30 a.m. EDT. Import and export prices may have increased 0.3% and 0.2% month-over-month, respectively, slower than the 0.8% increases each in the previous month.
The Fed is scheduled to release its industrial production report for February at 9:15 a.m. ET. The consensus estimate calls for industrial output to remain unchanged from the previous month despite a 0.3% increase in manufacturing production. These metrics fell 0.1% and 0.5%, respectively, in January.
The University of Michigan’s preliminary consumer sentiment index is due at 10 a.m. ET and is expected to come in at 77.1 for March, up slightly from 76.9 in February. Traders may also focus on the survey’s inflation expectations readings.
Adobe Inc. (NASDAQ:ADBE) fell over 11.5% in premarket trading following the company’s earnings announcement.
Other stocks reacting to earnings released after the market close Thursday are Blink Charging Co. (NASDAQ:BLNK) (down about 8.50%), Smartsheet Inc. (NYSE:SMAR) (down about 12%), PagerDuty, Inc. (NYSE:PD) (down over 7.50%), Cardlytics, Inc. (NASDAQ:CDLX) (up over 38.50%), Ulta Beauty, Inc. (NASDAQ:ULTA) (down about 6.50%) and Zumiez Inc. (NASDAQ:ZUMZ) (down over 6%).
Coinbase Global, Inc. (NASDAQ:COIN) fell over 5% following the crypto sell-off.
Rivian Automotive, Inc. (NASDAQ:RIVN) climbed about 4% after Piper Sandler upgraded the stock to Overweight.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures fell 0.63% to $80.75 in premarket trading, reversing some of the 1.93% gain they made on Thursday. Gold futures edged up, although they still trade off the record highs.
The yield on the 10-year Treasury bond, which spiked on Thursday in the aftermath of the inflation data, edged down 0.019 points to 4.279%. Bitcoin (CRYPTO: BTC) fell nearly 8% and traded below the $67,500 level.
Most Asian markets retreated on Friday, tackling Wall Street’s overnight negative lead, although the Chinese market advanced moderately after weak house prices and money stock and loan growth data released from the country raised hopes of more government stimulus.
European stocks rose modestly in late-morning deals, with the Euro STOXX 50 Index up about 0.40%.
