The United States, United Kingdom, and Germany rank among the top countries holding cryptocurrencies at the government level, according to data from Arkham Intelligence. The crypto analytic firm’s onchain analysis shows that the U.S. government holds 212,847 bitcoins while El Salvador has been purchasing one bitcoin daily as announced by its president. Top Government Holders […]
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In Amazon‘s (AMZN -1.54%) annual shareholder letter released on Thursday, CEO Andy Jassy said, “Generative AI may be the largest technology transformation since the cloud … and perhaps since the Internet.” If his excitement about artificial intelligence (AI) was apparent from that statement, he went on to say, “The amount of societal and business benefit … will astound us all.”
There’s no denying that AI has the potential to generate a windfall for companies that get in on the ground floor. You might be surprised to learn that Amazon is one such company. According to Jassy, “much of this world-changing AI will be built on top of Amazon Web Services (AWS).”
When AI adoption started in earnest last year, many believed Amazon was falling behind, but that narrative is flawed. The company has since unveiled a wide range of AI initiatives across its vast retail and cloud computing empire. It developed specialized processors that run AI models, AI-powered apps to help its e-commerce customers, and conversational digital assistant Q to help AWS users. Amazon also has a $4 billion stake in start-up Anthropic AI, further boosting its credentials.
However, it’s Amazon’s forward-looking strategy that should have AI investors excited. Jassy laid out a vision not focused on creating a killer consumer-facing app — like ChatGPT — but rather focused on providing developers with foundational AI models and the building blocks needed to create customized AI systems to suit their needs.
Amazon also announced that it added renowned AI pioneer Andrew Ng to its board. While Ng might not be a household name, he’s a rock star in AI.
When Alphabet first launched the Google Brain project in 2011 to develop a deep learning neural network to teach AI to recognize images, it was spearheaded by Stanford computer scientist Andrew Ng and noted AI researcher and Google fellow Jeff Dean. The project was wildly successful and is viewed as the catalyst that jump-started modern AI.
Ng offers a wealth of experience that will help Amazon succeed at AI. And at just 3 times sales, Amazon stock offers an attractive valuation.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Danny Vena has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet and Amazon. The Motley Fool has a disclosure policy.
Two of China’s largest fund management firms have recently been reported to be filing applications for spot bitcoin exchange-traded funds (ETFs), according to regional sources on Monday. Harvest Global Investments and Southern Fund are seeking approval from Hong Kong’s Securities and Futures Commission (SFC), aiming to obtain authorization to introduce spot bitcoin ETFs. China’s Investment […]
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We’re only one quarter into 2024 and already the Nasdaq Composite and S&P 500 are up over 9% year to date. But Vanguard’s largest growth-focused exchange-traded fund (ETF) is up even more.
Here’s why the Vanguard Growth ETF (VUG -0.24%) continues to outperform the major indexes while achieving diversification, why the ETF could continue to outperform, and whether it is worth buying now.
Image source: Getty Images.
The Vanguard Growth ETF targets the largest U.S.-based growth stocks no matter the industry or exchange they trade on. This is a different approach than the S&P 500 — which tracks the 500 largest U.S.-based companies by market cap (although there are a few other qualifications) or the Nasdaq Composite, which covers the largest companies on the Nasdaq Stock Market, but not the New York Stock Exchange.
Although the Nasdaq typically includes younger, more growth-focused companies, the New York Stock Exchange has some high-powered growth stocks that you wouldn’t get if you bought a Nasdaq ETF, like drug maker Eli Lilly. Or Visa and Mastercard, which have consistently outperformed the broader financial sector.
The inherent structure of the Vanguard Growth ETF means that it should outperform the Nasdaq Composite and S&P 500 if large-cap growth is leading the market, which is precisely what has been happening in 2023, 2024, and for most of the last five years.
|
Security |
YTD Total Return |
1-Year Total Return |
3-Year Total Return |
5-Year Total Return |
|---|---|---|---|---|
|
Vanguard Growth ETF |
11.2% |
44.1% |
39.9% |
131.7% |
|
Nasdaq Composite |
9.3% |
39.7% |
39.9% |
123.8% |
|
S&P 500 |
9.8% |
33.5% |
29.3% |
102.8% |
Data source: YCharts. YTD = year to date.
Over 50% of the Vanguard Growth ETF is weighted in the “Magnificent Seven” stocks — a term coined by Bank of America analyst Michael Hartnett to describe seven large, tech-focused companies. The ETF has a far higher concentration in the Magnificent Seven than the SPDR S&P 500 ETF or even the Invesco QQQ, which mirrors the performance of the Nasdaq-100. The Nasdaq-100 covers the 100 largest non-financial companies listed on the exchange.
|
Security |
Microsoft |
Apple |
Nvidia |
Amazon |
Alphabet |
Meta Platforms |
Tesla |
|---|---|---|---|---|---|---|---|
|
Vanguard Growth ETF |
12.8% |
11.2% |
7.8% |
6.9% |
6.3% |
4.5% |
2.3% |
|
Invesco QQQ |
8.8% |
7.4% |
6.6% |
5.2% |
4.9% |
4.9% |
2.3% |
|
SPDR S&P 500 ETF |
7.2% |
5.7% |
5.4% |
3.8% |
3.7% |
2.5% |
1.1% |
Data sources: Vanguard, Invesco, State Street Global Advisers.
The higher weightings in outperforming stocks like Microsoft, Nvidia, and Amazon offset the underperformance of higher-weighed stocks like Apple, Alphabet, and Tesla. As mentioned earlier, the Vanguard Growth ETF has more flexibility regarding what stocks it can include, allowing it to take advantage of growth across different pockets of the market.
The biggest drawback of the Vanguard Growth ETF is its valuation. The price-to-earnings (P/E) ratio is a sky-high 41.6 compared to 36.3 for the Invesco QQQ and 26.2 for the SPDR S&P 500 ETF. An expensive valuation is what you get with heavy concentration in premium-priced stocks — like most of the Magnificent Seven. However, P/E based on trailing-12-month earnings only tells part of the story.
Nvidia and Eli Lilly, which collectively make up a whopping 10.4% of the Vanguard Growth ETF, have very high P/E ratios. But analyst consensus estimates forecast their earnings to more than double over the next 12 months — which is why their forward P/E ratios are less than half current P/E ratios.
NVDA PE Ratio data by YCharts
The valuations of Nvidia and Ely Lilly are a good lesson in why a growth-focused ETF can look so expensive in the short term but is actually more reasonable if earnings deliver. Granted, there’s a lot of uncertainty when it comes to banking on forward earnings. These are just projections, and a lot can go wrong within and outside of a company’s control.
The Vanguard Growth ETF gives growth investors the complete package of diversification and high weightings in the market’s top growth stocks. At a mere 0.04% expense ratio, a $1,000 investment in the fund would incur just $0.40 in annual fees.
The ETF just made a new all-time high and is more expensive than it used to be. But investors shouldn’t be approaching growth ETFs or growth stocks in general based on their past earnings, but on what the investment could deliver in the future.
The ETF will probably continue to be more volatile than the S&P 500. But it’s worth considering if you want to invest in growth but don’t know where to start or are just looking for a simple way to add to your growth holdings without incurring high fees from more expensive financial products.
Bank of America is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Bank of America, Mastercard, Meta Platforms, Microsoft, Nvidia, Tesla, Vanguard Index Funds-Vanguard Growth ETF, and Visa. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard, long January 2026 $395 calls on Microsoft, short January 2025 $380 calls on Mastercard, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Baltimore City Fire Boat 2 floats past the Dali container vessel after it struck the Francis Scott Key Bridge that collapsed into the Patapsco River in Baltimore, Maryland, U.S., on Tuesday, March 26, 2024.
Bloomberg | Bloomberg | Getty Images
The collapse of a major Baltimore bridge and its knock-on effects could result in the biggest-ever marine insurance payout, the chair of insurance giant Lloyd’s of London said on Thursday.
Analysts have forecast that insured losses from the disaster would amount to a figure in the single-digit billions, after a huge cargo ship crashed into the Francis Scott Key Bridge on Tuesday. Six people were presumed dead.
“We’re beginning to deploy resources in anticipation of this being a very substantial claim for the industry. And for the Lloyd’s market, it’s going to take some time for for the complexity of the situation to unravel,” Bruce Carnegie-Brown told CNBC’s “Squawk Box Europe.”
“So, [it’s] very early days to call a number. I don’t at this point anticipate that it’s outside our realistic disaster scenario planning. It feels like a a very substantial loss, potentially the largest-ever marine insured loss, but not outside parameters that we plan for.”
Carnegie-Brown added that, while there would clearly be claims for the ship, cargo and the bridge, it is “second-order impacts” that would become “substantial.”
“A lot of business is going to be interrupted, supply chains are going to be interrupted by ships that are both trapped inside the port and of course, ships that were trying to gain access to the port that no longer can, and those second order effects will take some time to work through,” he said.
Baltimore is the 11th biggest port in the U.S. and the country’s busiest for the import and export of autos and light trucks. Supply chain operators are scrambling to minimize the impact on trade.
Morningstar DBRS analysts said in a Wednesday note that insured losses could total between $2 billion and $4 billion, depending on the length of time that the port is blocked. Such a figure would surpass the current highest amount, which was paid out from the capsizing of the Costa Concordia cruise ship in 2012.
Various insurance policies are likely to be triggered across marine liability and hull, property, cargo and business interruption.
“Despite the hefty insured losses, we expect they will remain manageable for the insurance industry as they will involve a large and diversified pool of well capitalized insurers and reinsurers,” Morningstar said.
Barclays puts the potential insurance claims between $1 billion and $3 billion.
The Singapore-flagged container vessel was chartered by Danish shipping giant Maersk and was carrying its customers’ cargo, but it was operated by charter vessel company Synergy Group. Early reports suggest the ship lost power before hitting the bridge.
Investigations will be carried out by authorities in both Singapore and the U.S. to establish legal liability, as part of a complex process that could take months or years.
Maersk will have had liability cover as the charterer, rather than as the operator of the vessel, David Osler, shipping and commodities principal analyst at Lloyd’s List Intelligence, told CNBC earlier this week.
Barclays analysts said in a Wednesday note that German autos manufacturers BMW, Mercedes and Volkswagen are most exposed, as European imports accounted for 40% to 50% of U.S. sales in recent years.
BMW told CNBC that the incident would not impact material supplies for its U.S. plant, and that the company was in contact with its logistics partner regarding imports. Volkswagen said its port operations were located on the seaboard side of the bridge and would not be impacted, but noted that it may face trucking delays. Mercedes noted that other entry ports, such as Brunswick, Georgia, would help ease import pressures.
“While there will be near term disruptions in auto imports and exports, I’m confident that Customs and Border Protection, regional ports, and terminal operators will work closely with the auto industry to identify optimal shipping alternatives until the Port of Baltimore resumes vessel operations,” Mitch Merriam, vice president of borders and maritime security at K2 Security Screening, told CNBC by email.
“The Port of Baltimore is going to suffer in the short term, but plans are already underway to divert and accommodate the additional traffic at other east coast ports, including Philadelphia, Norfolk, Savannah and Charleston. All of them can handle cars and light trucks.”
The port handles a wide range of goods including sugar and gypsum and is used by retailers such as Home Depot, Ikea and Amazon.
— CNBC’s Ganesh Rao and Lori Ann LaRocco contributed to this story.
The crypto community’s attention has been drawn to a Bitcoin whale who recently moved a huge portion of their BTC holdings across different wallets. This action has sparked the curiosity of those in the community about the reason for these transactions.
Blockchain analysis platform Arkham Intelligence first brought this occurrence to the community’s attention when it mentioned in an X (formerly Twitter) post that the Bitcoin address (37XuVSE) had moved over $6 billion in BTC to three new addresses.
As part of the transactions, $5.03 billion worth of BTC was sent to one of these addresses (bc1q8yj), while the two other addresses (bc1q6m5 and bc1q592) received $561.46 million and $488.40 million worth of BTC respectively. Arkham added that one of the wallets (bc1q592) has since then proceeded to transfer the received funds to another wallet.
Notably, the wallet which moved $6 billion in BTC was before now the fifth richest Bitcoin address having held over 94,500 BTC in its wallet. As of now, it still holds 1.31 BTC in the wallet in question. Interestingly, before now, this address was dormant as it had not moved any of this BTC which it received since 2019.
Transactions of such magnitude are always sure to cause a stir in the crypto community, considering the impact such whales can have on the market. Usually, a move like this can cause community members to speculate that the whale may be looking to offload their tokens and take profits. However, the fact that these transactions weren’t made to exchange-linked wallets has quelled such speculations.
Bitcoinist recently reported on BlackRock’s Bitcoin wallet, which has continued to accumulate Bitcoin at an astonishing rate due to the impressive demand for its iShares Bitcoin Trust (IBIT). Despite just launching this ETF in mid-January 2024, BlackRock now holds 243,126 BTC for the fund.
BlackRock’s BTC holdings has seen it rise to becoming one of the largest corporate BTC holders, only behind centralized exchanges Binance, Bitfinex, and Coinbase and fellow Bitcoin ETF issuer Grayscale. A sustained demand for the IBIT ETF could however see BlackRock surpass these entities at some point.
That is also something that could reflect positively on Bitcoin’s price seeing as how instituitional demand for the flagship crypto has helped propel it to new highs.
At the time of writing, Bitcoin is trading at around $70,500, up in the last 24 hours according to data from CoinMarketCap.
BTC price recovers above $71,000 | Source: BTCUSD on Tradingview.com
Featured image from Forbes, chart from Tradingview.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
This week, blockchain observers noticed that the “37X” wallet, once holding the title of the fifth-largest bitcoin wallet, was activated for the first time since 2019. This significant move involved the transfer of 94,504.03 bitcoin into three distinct addresses. One of these recipient wallets has now risen to become the sixth-largest bitcoin holder, showcasing a […]
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Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) is a conglomerate that directly owns a large number of companies. One, Northern Natural, is a midstream giant with a particular focus on natural gas. If you want to invest like Buffett, you can own a midstream giant focused on natural gas, too, by buying high-yielding Enterprise Products Partners (NYSE: EPD). Here’s what you need to know.
The midstream business is very boring, but that’s probably what makes it so attractive to Buffett. Northern Natural owns vital infrastructure assets and charges customers tolls for using them. That creates a reliable stream of cash flows that Berkshire Hathaway can use however it likes. Right now, that likely means building up the company’s $33.7 billion cash hoard and $130 billion in short-term investments as it searches for new acquisition candidates.
Buffett is picky with his acquisitions, preferring to wait until he finds a good company at a good price. Northern Natural obviously made the cut, with 14,200 miles of natural gas pipelines in its system. According to Berkshire Hathaway, Northern Natural owns the largest interstate natural gas pipeline system in the United States. In addition to the massive pipeline system, it also operates natural gas storage assets and liquefied natural gas storage peaking units.
None of that is at all surprising. It’s pretty much what you would expect from a midstream energy company. These are largely toll-taker businesses that generate reliable cash flows from large and expensive-to-build energy infrastructure. And many of the biggest publicly traded players in the space offer handsome dividends. One that stands out is Enterprise Products Partners.
Enterprise is one of the largest energy infrastructure players in North America, sporting a $60-billion-plus market cap. It has an investment-grade balance sheet and has increased its distribution for 25 consecutive years. Distributable cash flow covered the distribution by a very impressive 1.7 times in 2023. And — perhaps the best part for income-focused investors — the yield is a hefty 6.9%.
Enterprise Products Partners’ portfolio is a bit broader than that of Northern Natural, spanning across pipelines, storage, processing, and transportation, including facilities that export energy around the world. It also handles more than just natural gas, though it is a very big player in the natural gas arena. To give a sense of Enterprise’s scale, in 2023 it handled 34% of all U.S. waterborne natural gas liquid exports, 20% of crude waterborne exports, and 13% of waterborne petrochemical and refined product exports. In this way, it is actually more diversified than Northern Natural, which should probably be viewed as a positive by conservative investors.
To be fair, Enterprise’s distribution will likely make up the lion’s share of an investor’s total return. If you are looking to use that income to supplement your Social Security in retirement, though, this will probably not be a problem for you. That said, slow and steady distribution growth is likely, because Enterprise has the financial strength and scale to be an industry consolidator and it has around $6.8 billion worth of capital investments planned through 2026. That, of course, comes on top of regular price increases that are generally included in its contracts.
While Enterprise won’t excite you, if history is any guide, it should provide you with years of reliable income. The one fly in the ointment is that Enterprise is a master limited partnership (MLP), which can create some tax complications. MLPs don’t play well with tax-advantaged retirement accounts and you will have to deal with a K-1 form come tax time. But those are likely to be small hindrances when you weigh them against the hefty income stream you’ll be adding to your portfolio.
You could obviously own a piece of the Northern Natural if you bought Berkshire Hathaway. But you won’t directly benefit from the cash flows it generates because Berkshire Hathaway doesn’t pay a dividend. If you buy Enterprise Products Partners, one of the largest and most reliable midstream players in North America, you can directly collect its hefty distributions and use them as you see fit. Dividend investors will probably find that to be a very attractive alternative.
Should you invest $1,000 in Berkshire Hathaway right now?
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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.
Warren Buffett Owns the Largest Natural Gas Pipeline System in the U.S. Want to Invest Like Him? Buy This High-Yield Pipeline Stock. was originally published by The Motley Fool
Sales of Non-fungible tokens (NFTs) have witnessed a notable uptick this past week, climbing 11.62% to hit $442.02 million over the previous seven days. The most significant transaction was the sale of the ‘Alien’ Cryptopunk #3,100, donning a headband, for $16 million, with Bitcoin-based NFTs claiming the lead in sales volume across 22 different blockchains. […]
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