Private Client Group

March 2nd, 2017

Lessons from Warren Buffet’s Annual Letter to Shareholders

Share
Subscribe

Warren Buffet released his annual letter to shareholders, Trump addressed Congress for the first time and Snapchat went public with its IPO this week – Get all the details in this edition of Steady Investor’s Week…

Lessons from Warren Buffet’s Annual Letter to Shareholders – the Oracle of Omaha always has insightful and interesting things to say about investing, and his message on the economy and investing in the stock market is almost always consistent with our belief system here at Zacks Investment Management. We have long held the belief that investors who buy quality equities and invest with confidence over the long-term will generate satisfactory results. In our view, building a portfolio of diversified stocks, while maintaining confidence (even through bad times) that the United States economy will continue to innovate, thrive, and lead over the long-term, is a winning formula. We believe over time and through economic cycles that U.S. corporations will continue profit growth while generating gains for stock investors. Readers should check out Mitch Zacks’s column next week for more highlights from Buffet’s letter, but here are a couple:

The Future of Content – as it relates to the Info Tech and Media allocations within an investor portfolio, it’s important to think about the impact of video and streaming content. That is evident in the powerful rise of Netflix and YouTube (owned by Google). Recent data showed that YouTube viewers across the globe are now watching more than 1 billion hours of videos a day, which puts it close to even with the amount of television watched in the U.S. (1.25 billion hours a day). Companies are scrambling to stay relevant and claim their stake in viewership and hours streamed. Facebook counts 100 million hours of daily video news and Comcast has recently inked a deal to allow for search and streaming of YouTube videos through cable boxes. Investors must take a close look at the landscape of video streaming as it evolved, and decipher who will be the winners and losers.

President Trump Addresses Congress for the 1st Time – President Trump stood before Congress Tuesday to lay out the ideas and pledges his administration intends to take up in the next four years. Many agreed it was Trump’s most ‘presidential’ speech ever given, and it outlined plans on virtually every issue discussed during the campaign. Though, as is customary with these types of addresses, it was short on policy detail. Among the ideas put forward in the speech, the President pledged to overhaul the immigration system, improve jobs and wages for Americans, and promised “massive” tax relief to the middle class and tax cuts for companies. He will also up the ante on defense spending while reforming healthcare so it is more accessible, less costly, and not mandatory. He also plans to ask Congress for $1 trillion in infrastructure investment – guided by “Buy American and Hire American” principle. Most of the ideas laid out involve enormous price tags, but there is no clear indication of where the money will come from.

Snapchat IPO – Snap Inc. finally went public this week with an IPO priced at $17/share, but at market open that number was already $24. Snap Inc. raised a whopping $3.4 billion in the IPO and a share price of $24 values it at $29 billion, which means it enters the marketplace at a valuation at least twice as expensive as Facebook Inc., and four times costlier than Twitter Inc. Before investors get too excited and chase the heat, here is some data to consider: Snap posted a net loss last year of $515 million and user growth fell below 50 percent in the fourth quarter for the first time since at least 2014.

Disclosure

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. The information contained herein has been obtained from sources believed to be reliable but we do not guarantee accuracy or completeness. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.
READ PREVIOUS
If Robots Take American Jobs, Should We Tax Them?
READ NEXT
Trump Pulls out of the Trans-Pacific Partnership

Explore Zack’s Archives

View
Mitch's Mailbox
May 1st, 2024
Keep Up With The Latest Rules On Inherited IRAs
Read more
Private Client Group
April 29th, 2024
Mixed Signals In U.S. Housing, U.S. And Europe Economies, Retail Sales Show Strength
Read more
Mitch on the Markets
April 29th, 2024
Why Small Caps Lagged Earlier in 2024—and Pulled Back More in April
Read more
Mitch's Mailbox
April 24th, 2024
What A Strong Dollar Means For The Markets And Economy
Read more
Private Client Group
April 22nd, 2024
Fed Rate Cut Retreat, Pension Funds Pull Billions From Market, High Oil Prices
Read more
Mitch on the Markets
April 22nd, 2024
How Badly Are Rate Cuts Needed In This Bull Market?
Read more

Daily financial tips directly
from the Zacks family.

Top

Search

Contact

I'm a Private Client I'm a Financial Professional