An eclipse like the one on April 8 won’t happen again until 2044, so millions of Americans are paying to get a glimpse of Monday’s total solar eclipse.
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Warren Buffett is one of the wealthiest people in the world, with a net worth estimated at over $133 billion.
Despite his wealth, the legendary investor and Berkshire Hathaway Inc. CEO lives a frugal lifestyle, preferring the simple pleasures of a McDonald’s hamburger over extravagant dining.
“I buy everything I want in life,” Buffett said at the 2017 New York City premiere of the documentary “Becoming Warren Buffett,” according to People.com. “Would 10 homes make me more happy? Possessions possess you at a point. I don’t like a $100 meal as well as a hamburger from McDonald’s. That’s the way I’m put together, I don’t equate the amount I spend with the enjoyment I’m going to get from something.”
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This humble approach extends to Buffett’s transportation and housing. In a 2013 CBS News interview, Buffett was spotted driving around his hometown of Omaha, Nebraska, in a 2006 Cadillac. While being interviewed by journalist Rebecca Jarvis, he showed off his favorite places in the city, including the local McDonald’s. When Jarvis asked what he typically ordered there, Buffett replied, “Three times out of four, I get the sausage McMuffin. Lunchtime I get the Quarter Pounder and fries.”
Despite now driving a more recent 2014 Cadillac model, Buffett has never been one to flaunt his wealth with lavish vehicles. According to his daughter, he looks for hail-damaged cars to get the best deal.
The same goes for his living situation. Buffett still resides in the home he purchased in 1958 for $31,500, the equivalent of around $338,000 today — less than the price of the average home in 2024.
“I am happy in a pair of khakis and a sweater so I don’t need fancy clothes. I don’t need fancy food,” Buffett said.
Buffett’s frugal philosophy extends beyond his personal life. He has pledged to give away 99% of his wealth to philanthropic causes, and he lives on a salary of $100,000 per year from Berkshire Hathaway.
For Buffett, his immense wealth is not a source of lavish spending but a responsibility to use it wisely and give back to others. By modeling a life of simplicity and moderation, the Oracle of Omaha shows that true happiness and fulfillment come not from material possessions, but from within.
Buffett’s lifestyle offers a valuable lesson: Happiness is not directly proportional to wealth, but securing sufficient funds for a comfortable retirement remains essential. As the bar for retirement savings continues to rise, seeking guidance from a financial adviser gains importance. Such professional advice can help people establish a robust financial strategy, ensuring a worry-free enjoyment of their retirement years.
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This article Warren Buffett Says He Prefers A McDonald’s Burger Over A $100 Meal — His Typical Lunch Is A ‘Quarter-Pounder With Fries’ originally appeared on Benzinga.com
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AMC Entertainment Holdings Inc. CEO Adam Aron’s compensation package increased to $25.4 million in 2023, from $23.7 million in 2022 and $18.9 million in 2021, according to a proxy statement filed with the SEC Friday.
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Apple and Microsoft each have their selling points, but only one can be the better investment.
Fool.com contributor Parkev Tatevosian compares Apple (AAPL -0.67%) and Microsoft (MSFT -0.22%) to determine which is better for long-term investors.
*Stock prices used were the afternoon prices of April 5, 2024. The video was published on April 7, 2024.
Parkev Tatevosian, CFA has positions in Apple. The Motley Fool has positions in and recommends Apple and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
Despite strong quarterly results, Zscaler’s outlook wasn’t strong enough to support its valuation.
Shares of Zscaler (ZS 0.32%) fell 20.4% in March, according to data provided by S&P Global Market Intelligence. Despite delivering impressive quarterly financial results, the cybersecurity stock still slid lower thanks to a combination of pessimism about its outlook, an expensive valuation, and unfavorable market conditions.
Zscaler’s quarterly results were solid, but its outlook was less impressive
Zscaler reported quarterly earnings on Feb. 29 after the market closed for the day. The company attained $525 million in quarterly revenue, 4% above Wall Street’s estimates and 35% higher than the prior year.
That translated to 108% growth in adjusted net income and a 60% increase in free cash flow. High growth paired with margin expansion is a recipe for success. The company also reported a strong net dollar retention of 117%, indicating high customer satisfaction, product enhancements, and effective sales operations.
Image source: Getty Images.
Those positive results weren’t enough to keep the stock from tumbling. The company’s forecasts suggest a slowdown to 28% revenue growth, and the full-year guidance implies only 24% annual growth in the fourth quarter. Those fell within the range of analyst forecasts, but the most bullish investors are probably dealing with a reality check.
Zscaler’s stock is too expensive to withstand minor speed bumps
The quarterly report was, at worst, a mix of good and bad news. Some analysts remain bullish on the stock, and the new guidance exceeded expectations from some analysts, even if it fell short of the more bullish estimates. That seems at odds with a 20% drop.
Zscaler’s rate of expansion is slowing as it matures and saturates its target markets more deeply. Investors often struggle to attach a valuation to companies reporting high growth rates by decelerating. This creates volatility, especially when the valuation ratios are expensive.
Zscaler stock climbed 26% between its last two earnings reports. Its recent 20% drop might not reflect a fundamental shift in expectations but rather normalization after a strong period as some investors take gains off the table.
The stock’s valuation ratios expanded in the months leading to the most recent report, and they’ve since returned to less speculative levels.
ZS PE Ratio (Forward) data by YCharts. PE Ratio = price-to-earnings ratio. PS Ratio = price-to-sales ratio.
Its forward price-to-earnings (PE) ratio returned to 70 after climbing to 90, price-to-sales climbed above 20 before falling back to 15, and price-to-free-cash-flow surged above 75 before settling back to 57. These valuation ratios are still fairly expensive, so it’s fair to expect volatility any time there’s doubt about Zscaler’s future results or the relative outperformance of growth stocks in general. Both conditions were met in March, and Zscaler gave back some of its prior gains.
There’s plenty of long-term opportunity for Zscaler shareholders to enjoy impressive returns, but expect more volatility in the years to come as the cybersecurity industry matures and Zscaler transitions from explosive growth to cash-flow generation.
Ryan Downie has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Zscaler. The Motley Fool has a disclosure policy.
There’s no denying Warren Buffett’s remarkable track record. As the CEO of Berkshire Hathaway, he has done an amazing job compounding capital at high rates over multiple decades. This is why the average investor closely watches what the Oracle of Omaha owns.
Berkshire’s massive $369 billion portfolio has dozens of stocks. But Apple (NASDAQ: AAPL), which represents 41.4% of the overall portfolio, stands out as the single largest holding. The FAANG stock has soared 542% since the start of 2016 (as of April 2), which is around the time Buffett first started buying the business.
Before investors contemplate whether it’s a good idea to scoop up shares today, it’s important to understand the factors that first drew Buffett to Apple.
Apple’s wonderful qualities
Even in early 2016, Apple had one of the world’s strongest brands, boosted by its lineup of incredibly popular hardware products. This gave the company pricing power. Consumers want to continue paying up for new devices.
Buffett appreciates businesses that can consistently ask their customers to pay more without hurting demand. Another top Berkshire holding is Coca-Cola, which certainly fits this category.
Apple is a financial powerhouse. In fiscal 2015, the business posted an operating margin of 30%. And it generated $70 billion of free cash flow (FCF) that year.
This type of profitability continues today. Apple produced $100 billion of FCF in fiscal 2023. Management used this windfall to pay $15 billion in dividends and to repurchase $83 billion worth of outstanding stock.
In addition to strong financial performance, valuation is another top factor that Buffett looks at. During the first three months of 2016, Apple shares traded at an average price-to-earnings (P/E) ratio of 10.6. Given some of the sky-high valuations in the market today, this was an absolute steal for such a dominant company. Buffett took full advantage of the buying opportunity.
Should you buy Apple stock right now?
While Apple has obviously worked out as a tremendous investment for Berkshire and Buffett, investors shouldn’t just automatically buy the stock right now. I think it’s best to view the current situation with a fresh perspective.
If investors can agree on one thing today, it’s that Apple is no longer the screaming bargain that it was about eight years ago when Buffett first bought shares. In my opinion, this is an expensive stock right now, which makes sense given its impressive performance over the years.
Apple shares trade at a current P/E ratio of 26.3. To be fair, this has come down from the 32.3 it was less than four months ago. But it’s still pricey.
That’s because Apple certainly doesn’t have the same growth potential that it did several years ago. This is a far more mature enterprise today.
In fact, the business saw its sales decline slightly in fiscal 2023. And over the next three years, Wall Street analysts expect revenue and earnings per share to rise at annualized clips of 4.4% and 8.3%, respectively. Paying such a high valuation multiple doesn’t seem like a smart move considering these weak forecasts.
We can’t read his mind. However, I suspect Buffett still owns the stock because he doesn’t want to trigger a taxable event. Or maybe he simply wouldn’t know what to do with all the cash, a problem that Berkshire has already been dealing with.
Apple has been a huge winner historically. But based on where things stand today, it’s best to pass on the stock.
Should you invest $1,000 in Apple right now?
Before you buy stock in Apple, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Apple wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $539,230!*
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Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.
Almost Half of Warren Buffett’s $369 Billion Portfolio Is Invested in Only 1 Stock was originally published by The Motley Fool
By David Lawder
BEIJING (Reuters) -U.S. Treasury Secretary Janet Yellen warned China on Monday that Washington will not accept new industries being decimated by Chinese imports, as she wrapped up four days of meetings to press her case for Beijing to rein in excess industrial capacity.
Yellen told a press conference that U.S. President Joe Biden would not allow a repeat of the “China shock” of the early 2000s, when a flood of Chinese imports destroyed about 2 million American manufacturing jobs.
She did not, however, threaten new tariffs or other trade actions should Beijing continue its massive state support for electric vehicles (EVs), batteries, solar panels and other green energy goods.
Yellen used her second trip to China in nine months to complain that Beijing’s overinvestment has built factory capacity far exceeding domestic demand, while fast-growing exports of these products threaten companies in the U.S. and other countries.
She said a newly created exchange forum to discuss the excess capacity issue would need time to reach solutions.
Yellen drew parallels to the pain felt in the U.S. steel sector in the past.
“We’ve seen this story before,” she told reporters. “Over a decade ago, massive PRC (People’s Republic of China) government support led to below-cost Chinese steel that flooded the global market and decimated industries across the world and in the United States.”
Yellen added: “I’ve made it clear that President Biden and I will not accept that reality again.”
When the global market is flooded with artificially cheap Chinese products, she said, “the viability of American and other foreign firms is put into question.”
Yellen said her exchanges with Chinese officials had advanced American interests and that U.S. concerns over excess industrial capacity were shared by Washington’s European allies, Japan, Mexico, the Philippines and other emerging markets.
PUSHBACK
China’s vice finance minister, Liao Min, told Chinese media that Beijing “has fully responded” to U.S. questions on overcapacity and expressed “grave concern” over restrictions Washington imposes on trade and investment.
Liao said China’s “current competitive advantages are rooted in China’s large-scale market, complete industrial system and abundant human resources,” decrying the “escalation of green protectionist measures by some developed economies.”
“China will not sit idly and ignore it,” Liao said in remarks published on the ministry’s website.
China’s parliament, the National People’s Congress, said in March the government would take steps to curb industrial overcapacity.
But Beijing says the recent focus by the U.S. and Europe on the risks from China’s excess capacity is misguided.
Chinese officials say the criticism understates innovation by companies in China and overstates the importance of state support in driving their growth. They also say tariffs or other trade curbs will deprive global consumers of green energy alternatives key to meeting global climate goals.
WTO RULESTrade curbs on Chinese EVs would contravene World Trade Organisation rules, the industry and information technology ministry said in a statement carried by state media CCTV and China Daily.
The Chinese ministry added that it was committed to support EV exports and would help “accelerate the overseas development” of the industry including planning for shipping and logistics and support for firms to innovate and meet global standards.
Chinese Commerce Minister Wang Wentao voiced more pointed objections during a roundtable meeting with Chinese EV makers in Paris, saying U.S. and European assertions of Chinese excess EV capacity were groundless.
Rather than subsidies, China’s EV companies rely on continuous technological innovation, perfect production and supply chain systems and full market competition, Wang said on his trip to discuss a European Union anti-subsidy inquiry.
Yellen suggested a possible short-term solution was for China to take steps to bolster consumer demand with support for households and shift its growth model away from supply-side investments.
Yellen spoke about the issue at length with Premier Li Qiang and also met Finance Minister Lan Foan on Sunday. She met People’s Bank of China (PBOC) Governor Pan Gongsheng and former Vice Premier Liu He on Monday.
In a CNBC interview after the meetings, Yellen said she was “not thinking so much” about trade curbs on China, as much as shifts in its macroeconomic environment. But she reiterated she would not rule out tariffs.
(Writing by David Lawder and Marius Zaharia; Editing by Clarence Fernandez and Paul Simao)
A Southwest Airlines Boeing 737 MAX 8 arrives at Daniel K. Inouye International Airport on January 20, 2024 in Honolulu, Hawaii.
Kevin Carter | Getty Images
An engine cowling fell off of a Southwest Airlines Boeing 737-800 and struck a wing flap during takeoff from Denver International Airport, the Federal Aviation Administration said Sunday.
The FAA said Southwest Flight 3695 was on its way to Houston’s William P. Hobby Airport and safely returned to the gate at Denver at 8:15 a.m. local time. Southwest said customers on the flight transferred to a different aircraft and were scheduled to arrive at their destination three hours late.
“Our Maintenance teams are reviewing the aircraft,” Southwest said. The FAA said it is investigating the incident. Southwest didn’t immediately respond when asked when the plane and engine last underwent maintenance.
In response to a request for comment, Boeing pointed to Southwest’s statement.
The cowling loss comes as the FAA investigates a separate Southwest incident in March. One of its flights strayed off course and flew close to the air traffic control tower at LaGuardia Airport as it attempted a landing in New York.
The plane is an older model of the Boeing 737 than the Max jets. Boeing is under heightened regulatory scrutiny after a January incident when a door plug blew off a nearly new 737 Max 9 when the Alaska Airlines flight was at 16,000 feet, causing a near-catastrophe.
Boeing’s quality control issues have spiraled into safety concerns, slowing deliveries of new Max aircraft. Big Boeing customers like Southwest and United say the issues have affected their growth plans.
The long-awaited FAA certification of its 737 Max 7 and Max 10 models is also behind previous schedules. Boeing CEO Dave Calhoun last month said that he would step down by year’s end, and Boeing replaced its chairman and chief executive of its commercial airplane unit.
Roth IRAs are one of the most coveted accounts on the retirement scene for several reasons. For starters, you contribute after-tax dollars to the account so that you can enjoy tax-free income during retirement. Since you’re not required to withdraw money from the account during your lifetime, the money can keep growing, and you can pass it on to your heirs.
But you’ll want to jump on the benefits of a Roth IRA as soon as possible. Once your income jumps over the threshold, you won’t be able to make direct contributions to the account. So if you’re ready to unlock the power of a Roth IRA, here are three perks you don’t want to miss in 2024.
Image source: Getty Images.
1. Take advantage of the highest contribution limits ever
If you qualify to make direct contributions to a Roth IRA in 2024, you’ll be able to take advantage of the biggest contribution limits we’ve ever seen. This year, you can funnel up to $7,000 into a Roth IRA, provided your income sits below the threshold. And if you’re 50 or older, you can stash away as much as $8,000 as long as you plan to earn at least that much this year. These contribution limits jumped $500 over the cap for 2023.
Let’s say you qualified to contribute $8,000 every year. Within 13 years, you would be able to build a six-figure portfolio. Most likely, you’ll be able to hit six figures much faster if you invest in assets that generate superior returns. The more money you contribute to a Roth IRA, the more money you’ll have available to invest.
2. Invest in your favorite assets
If you’re working full-time, your employer probably offers some type of retirement plan, like a 401(k). For 2024, you can contribute up to $23,000 to the account, and your employer might even chip in a 401(k) match. But your 401(k) investment options are typically limited to a few investments, like index funds and target date funds.
Your Roth IRA offers more flexibility and freedom. You own and manage the account, so you’ll be able to decide what investments you can add to your portfolio. You could pump up your Roth IRA with a wide variety of traditional assets, including:
You could even look into a self-directed Roth IRA and gain access to more exotic assets, such as real estate, businesses, and digital currencies, that can supersize your returns. But you’ll want to make sure you understand the risks associated with these investments before you dive in.
3. Snag a Saver’s Credit
Contributions to a Roth IRA won’t lead to an up-front tax deduction, since they are made with after-tax dollars. But you may be eligible for a Saver’s Credit if your income isn’t too high. The IRS rewards low-and-moderate income retirement savers with a credit worth up to $2,000 ($1,000 if filing single) for making contributions to a qualified retirement account like a Roth IRA. Keep in mind that the Saver’s Credit is nonrefundable, so you won’t end up with a tax refund if your credit exceeds your tax bill.
This table shows whether you’re in the running for the Saver’s Credit. Your credit may be worth 10%, 20%, or 50% of your eligible retirement contributions, depending on your adjusted gross income and filing status.
|
Amount of Your Tax Credit Based on Income and Filing Status for 2024 |
Married Filing Jointly (AGI) |
Head of Household (AGI) |
All Other Filers (AGI) |
|---|---|---|---|
|
50% of your contribution |
$0 to $46,000 |
$0 to $34,500 |
$0 to $23,000 |
|
20% of your contribution |
$46,001 to $50,000 |
$34,501 to $37,500 |
$23,001 to $25,000 |
|
10% of your contribution |
$50,001 to $76,500 |
$37,501 to $57,375 |
$25,001 to $38,250 |
|
0% of your contribution |
Over $76,500 |
Over $57,375 |
Over $38,250 |
Data source: IRS.
If you qualify to make contributions to a Roth IRA and it makes sense for your portfolio, you want to do your research now so you can start taking advantage of the benefits. You may qualify for benefits right now, such as the Saver’s Credit, or position yourself to get more tax-free income during retirement.
“They have lived in the same house in New Jersey for 50 years and they don’t throw anything away.”
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