Andy Kessler reminders readers that stocks do go down even stocks where the business may have years of growth ahead of it. He writes in The Wall Street Journal: How do these bull bashes end? When the last skeptical buyer finally sees the light and buys into the dream that every car will be electric, that crypto replaces gold and banks, that we overindulge on vertically farmed “plant-based steaks” while streaming “Bridgerton” Season 5 before we hop on an air taxi for our flight to Mars. Those last skeptics (maybe already) convince themselves there’s no longer any downside. And then boom, it’s … [Read more...]

Does Chamath Palihapitiya have great timing? He sold $213 million in Virgin Galactic shares just before their prices cratered. Bloomberg reports: Palihapitiya, the investor who has helped drive the frenzied growth of blank-check companies, disposed of 6.2 million shares at an average price of $34.32 this week, based on a filing with the U.S. Securities and Exchange Commission. He still owns 15.8 million shares with his partner Ian Osborne through investment firm Social Capital Hedosophia, amounting to about a 6.5% stake. Palihapitiya previously sold shares worth almost $100 million in … [Read more...]

The FDA has approved the use of Johnson & Johnson's COVID-19 vaccine, which unlike its competitors from Pfizer and Moderna can be stored at room temperature and needs only one dose. The WSJ reports: The first single-dose Covid-19 vaccine, a shot from Johnson & Johnson, JNJ +1.55% was authorized for use, a big boost for a mass-vaccination campaign rushing to end the deadliest pandemic in more than a century. The vaccine’s authorization on Saturday, the third issued by the U.S. Food and Drug Administration, will give health authorities a desperately needed new source of doses as they … [Read more...]

Jamie Smyth and Robin Wigglesworth report on Peter Costello's view that the bubble in tech stocks being inflated by the world's central banks could cause a market "clean out." They write in the Financial Times: The world’s big central banks are inflating a bubble in technology stocks that will lead to a “clean-out” on global equity markets, the chairman of Australia’s $135bn sovereign wealth fund has warned. Rock-bottom interest rates and bond-buying programmes put in place to cushion the impact of the pandemic last year have left economies and markets vulnerable to a shock, Peter Costello … [Read more...]

This chart doesn’t require much explanation. What you are looking at is the number of stocks listed on U.S. exchanges with meaningful market values that are up more than 500% over the last year. Why 500% over a year? It is admittedly pretty arbitrary, but a nice round number that is so high it would be difficult to explain as something justified by improving fundamentals. The last time we saw anything close to this kind of mania was the dot-com bubble. Seasoned investors have the benefit of knowing how this type of mania ends. Stay cautious and prudent even if your neighbor’s … [Read more...]

There is a movement in business today to put "stakeholders" at the forefront of a business's thought. But it doesn't take too much thought to imagine how that would dry up investment as shareholders would look to put their money where it's treated best. JP Morgan has championed the stakeholder approach in the past, but when it came time to make a real decision, it chose long-term viability over the short-term public relations benefits of the "stakeholder" approach. Ross Kerber reports: JPMorgan Chase & Co CEO Jamie Dimon has led calls for companies to consider the needs of workers, … [Read more...]

James Bianco explains the dramatically changing investing preferences of the public, writing: There is no one definitive measure to show this shift, but the signs are unmistakable. Trading in individual stock options has been booming to new records, according to data from the Options Clearing Corporation. This has been led by purchases of options to buy stocks in lots of 10 contracts or fewer. Nearly 15 per cent of all trades are for one contract. Penny stocks have recently caught the fancy of investors. In December 2020, they traded 1tn shares, according to data firm SentimenTrader. That … [Read more...]