Tag: Motley Fool

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Stock market investors have had a tough time so far this year. Major market benchmarks are sharply lower from where they started the year, and every time Wall Street seems to have regained its footing, some new concern sends stocks reeling once again.

For those with money to invest, falling markets pose a conundrum. On one hand, share prices for thousands of stocks are much more attractive than they were a year ago, so if you still believe that a company’s business will succeed in the long run, getting to invest in more shares at lower prices is a bargain opportunity. On the other hand, nobody wants to buy a stock only to see it continue to lose ground.

So should you buy stocks now, or wait for some future sign? To get some insight on that question, it’s helpful to turn to the words of legendary investor Warren Buffett. The Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) CEO has been through plenty of bear markets in his long investing career, and his long-term investing approach has paid off with market-crushing returns through thick and thin. Here’s what Buffett has given as advice to those trying to decide whether to invest or wait in tough times.

Buffett’s advice for active investors

Buffett has a couple of ideas for active investors that at first seem to be in conflict. When you think about it, though, the net takeaway is to be aggressive but selective in choosing stocks to buy during difficult market conditions.

Buffett’s aggressive nature shines through in several statements. In the shareholder letter that came out in 2010, the Berkshire CEO wrote: “Big opportunities come infrequently. When it’s raining gold, reach for a bucket, not a thimble.” That approach in the aftermath of the financial crisis proved to be quite timely, as the ensuing bull market lasted throughout the 2010s and was one of the most prosperous periods in stock market history. It also underscores his much more commonly cited aphorism, “Be greedy when markets are fearful.”

Yet Buffett’s success has largely come from being selective with his investments. Fortunately, tough times offer great opportunities to see the truth about companies. As he noted in the shareholder letter that came out in 2002, “You only find out who is swimming naked when the tide goes out.” Even poorly run companies can do well in bull markets, but bear markets separate the wheat from the chaff.

Moreover, Buffett isn’t hesitant to hold off on investments he’s not completely confident about making. As he was quoted at the 1999 Berkshire shareholder meeting as saying: “The stock market is a no-called-strike game. You don’t have to swing at everything. You can wait for your pitch.” 

Buffett’s advice to less-active investors

Not everyone wants to spend a lot of time figuring out which companies are most likely to outperform their peers. For those less-active investors, Buffett also has some simple advice: Dollar-cost average using index funds.

Here’s specifically what Buffett told investors at Berkshire’s 2004 annual shareholders’ meeting: “If you accumulate a low-cost index fund over 10 years with fairly regular sums, I think you will probably do better than 90% of the people around you that take up investing at a similar time.”

Fortunately, there are plenty of such investing vehicles available for those who don’t want to dive into individual stocks. Tracking popular indexes like the S&P 500 or even the entire universe of stocks is possible through mutual funds and exchange-traded funds, many of which charge 0.1% or less in annual expenses to investors.

The right answer for you

The most important attribute successful investors share is having an investing strategy. What that strategy looks like, though, can differ among investors without sacrificing the potential for success. Buffett clearly understands this, and it’s why he acknowledges that different strategies will work better for different people.

In general, though, Buffett’s a big believer in bucking market trends, taking advantage of bargain opportunities, and beating back your emotions. The times when you’re likely most scared to invest have historically been the best times to get your money working the markets, and so even if you don’t dive in right now, you won’t want to wait too long before getting a solid investing plan in place.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Should you buy stocks now or wait? Here’s Warren Buffett’s advice appeared first on The Motley Fool Australia.

(function() { function setButtonColorDefaults(param, property, defaultValue) { if( !param || !param.includes(‘#’)) { var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0]; button.style[property] = defaultValue; } } setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’); setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’); setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’); })()

More reading

• Amazon, Microsoft, and Alphabet have partnered with this US cloud stock. Is it a buy?
• 2 unstoppable Warren Buffett stocks that can turn sitting cash into growing wealth
• The best investment, according to Warren Buffett, and how you can own it
• 6 reasons to buy Apple stock now and never sell
• Is this really the right time to invest in the stock market?

Dan Caplinger has positions in Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

from The Motley Fool Australia https://ift.tt/fx2HVqC

It’s a happy day for Endeavour Group Ltd (ASX: EDV) shareholders this Friday. Not because Endeavour shares are performing well though. At present, the drinks and pubs company has lost a nasty 2.11% so far this Friday, putting the Endeavour share price at $7.18 a share.

That’s a significant underperformance of the broader market. The S&P/ASX 200 Index (ASX: XJO) is down by around 1.15% so far today.

So why is it a happy day for Endeavour shareholders then?

Well, because it’s dividend payday.

Endeavour shareholders to receive final dividend today

Last month, Endeavour reported its full-year earnings for FY22. These included the declaration that the company’s final dividend for FY22 would come in at 7.7 cents per share, fully franked.

Endeavour shares traded ex-dividend for this payment back on 31 August. So investors will have had to own Endeavour shares before that date to be eligible for this dividend.

The 7.7 cents per share payment represents a pleasing 10% rise over last year’s final dividend of 7 cents per share. This (ironically) was Endeavour’s first-ever dividend as an independent ASX company. Remember, this business was spun out of Woolworths Group Ltd (ASX: WOW) last year.

But the final dividend was a significant reduction from Endeavour’s last dividend, the interim payment of 12.54 cents per share that investors received back in March.

But regardless, no doubt this dividend hitting investors’ bank accounts today will be a happy occasion for shareholders. Investors will be receiving this dividend in cash, as Endeavour does not currently offer a dividend reinvestment plan (DRP) enabling investors to receive additional Endeavour shares instead.

At the current Endeavour share price, this latest dividend gives the company a dividend yield of 2.14%.

Endeavour shares have been a fairly excellent investment to have held since the company was spun off last year.

The Endeavour share price is up a robust 5.74% in 2022 thus far, and up 17.7% since its ASX float in June 2021. By contrast, the ASX 200 is down by 10.85% and 7.4% respectively over those same periods.

The post Attention Endeavour shareholders: Here’s some news on your dividends appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Friday
• Have Woolworths shares ‘got their mojo back’?
• Supermarket shakeup: Do Coles shares offer better dividends than Woolworths?
• Down 6% in a month, is September a good time to buy Woolworths shares?
• Why this top broker is tipping 23% upside for the Woolworths share price

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/qWOVQuM

ASX uranium shares are suffering at the hands of the market on Friday, with some favourites tumbling as much as 5.5%.

Their woes follow a rough overnight session for some major global uranium names and come amid a shocking session for S&P/ASX 200 Index (ASX: XJO) energy stocks.

Shares in ASX 200 uranium producer Paladin Energy Ltd (ASX: PDN) are falling 3.9% right now.

Meanwhile, those of Bannerman Energy Ltd (ASX: BMN), Deep Yellow Limited (ASX: DYL), and Boss Energy Ltd (ASX: BOE) have slumped 4.6%, 3.3%, and 5.5% respectively.

For comparison, the ASX 200 has slipped 1% right now while the S&P/ASX 200 Energy Index (ASX: XEJ) has fallen 2.6%.

Let’s take a closer look at what might be going wrong for ASX uranium shares today.

What’s dragging on ASX uranium shares today?

ASX uranium shares are underperforming on Friday, dumping some of the gains made over the last few weeks.

Today’s fall included, the Bannerman share price has gained 46% over the last 30 days. Meanwhile, that of Paladin Energy is up 19%. Thus, their latest slump could partly represent profit taking.

It could also be a response to recent slumps recorded by major global uranium names.

The Canadian-listed Sprott Physical Uranium Trust – home of nearly US$3 billion worth of the energy commodity – fell 2.3% overnight. While that leaves it 5% lower than it closed last week’s trade, it’s still 15% higher than it was this time last month.

Meanwhile, the US-listed Global X Uranium ETF plunged 4% to its lowest price in nearly two weeks.

Their latest dips follow a rally, seemingly spurred by concerns of a global energy crisis.

A doubling down on nuclear energy – and, therefore, uranium – could be the next frontier for nations impacted by an energy crunch brought on by Russia’s invasion of Ukraine, as my Fool colleague Bernd reports.

And with Australia housing much of the world’s uranium resources, ASX shares could be in line to benefit.  

The post Why are ASX uranium shares getting smashed on Friday? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Even with today’s falls, the Paladin Energy share price is still up 31% in 3 weeks. Here’s why
• ASX uranium shares have had a stellar month. Are they just getting started?
• Why Macquarie is tipping 15% upside for the Paladin Energy share price
• Why has the Paladin Energy share price rocketed 20% in a month?
• What’s the outlook for ASX uranium shares in September?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/ys7V9e2

The market may be sinking today but the Westpac Banking Corp (ASX: WBC) share price has managed to avoid the selloff.

At the time of writing, the banking giant’s shares are up ever so slightly to $21.56.

This compares favourably to a 1.1% decline by the ASX 200 index.

Why is the Westpac share price outperforming the ASX 200?

The Westpac share price appears to be outperforming today thanks to a bullish broker note out of Citi this morning.

According to the note, the broker has reiterated its buy rating and lifted its price target on the bank’s shares to $30.00. Based on the current Westpac share price, this implies potential upside of approximately 39% over the next 12 months.

And that’s before dividends! If you include the $1.60 per share fully franked dividend that Citi expects Westpac to pay in FY 2023, the total potential return stretches to over 46%.

What did the broker say?

Citi is feeling positive about the Australian banking sector thanks to the unprecedented amount of excess liquidity that the banks are sitting on. It believes that this leaves them well-placed to benefit from higher rates and has upgraded sector earnings estimates in FY 2023 and FY 2024 to reflect this.

It isn’t just the Westpac share price that the broker is bullish on. It has retained its buy rating and $29.00 price target on Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares and upgraded National Australia Bank Ltd (ASX: NAB) shares to a buy rating with a $32.75 price target.

The only big four bank the broker isn’t positive on is Commonwealth Bank of Australia (ASX: CBA). It continues to believe that its shares are expensive and has retained its sell rating with a $85.50 price target.

The post Why is the Westpac share price outperforming the ASX 200 today? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Could Westpac shares soon be saying bon voyage to money managing?
• Which ASX 200 bank share will win the great tech battle?
• Westpac share price lifts amid latest competitive push
• Macquarie shares bear the brunt of bank sell-off amid inflation bomb
• Down 16% in a year, can the Westpac share price become a successful turnaround story?

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/LxfPUFr

The Core Lithium Ltd (ASX: CXO) share price is drifting lower in early trade on Friday.

At the time of writing, shares in the lithium player have tracked 4% lower to now rest at $1.44 apiece on no market-sensitive news.

In broad market moves, the S&P/ASX 300 Metals and Mining Index (ASX: XMM) is also trading down 160 basis points on the day.

What’s up with the Core Lithium share price?

Shares of Core Lithium have regressed lower today amid a wide sell-off across the broad indices on the ASX.

In fact, yesterday’s top performing sector, energy, is today’s laggard, trailing the other ASX sectors by the most in early trade.

The selling activity has been felt in Core Lithium today. Investors have pushed the share lower at a trading volume of 40% of the 4-week trading average in just a little more than 1 hour of trading.

Zooming out, and it’s been a tremendously busy week for shares trading on the ASX.

Chief to the downside pressure was hotter-than-expected inflation data out of the U.S. on Tuesday, signalling further rate increases from the US Federal Reserve in months to come.

The shock inflation print sent an impulse throughout global equity markets, and ASX shares were themselves put in the washing machine and hung to dry.

Unsurprisingly, a risk-off tone has swept through the Australian markets this week and this has seen a wide sell-off across a broad spectrum of sectors.

Energy, materials and mining have been particularly scorched, whilst defensives such as healthcare have traded in a narrow range.

With that, it’s unsurprising to see unprofitable lithium names such as Core undergo a small consolidation today.

The Core Lithium share price also nudged its 52-week high of $1.66 on 13 September, after making the pilgrimage from 52-week lows of 39.5 cents on 5 October 2021.

Despite today’s price action, the share remains up more than 144% this year to date and has clipped a 217% gain in the past 12 months.

The post Why is the Core Lithium share price sliding 4% today? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why is the Core Lithium share price tumbling 3% today?
• Here are the top 10 ASX 200 shares today
• Why did the Core Lithium share price leap another 6% on Tuesday?

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/NzBLjXE

It has been a day to forget for the Phoslock Environmental Technologies Ltd (ASX: PET) share price on Friday.

This morning the embattled water treatment company’s shares crashed as much as 80% to 5 cents.

This follows Phoslock’s return to trade after almost exactly two years in suspension.

What is going on with the Phoslock share price?

The Phoslock share price returned to trade at long last on Friday after the company received confirmation from the ASX that it has satisfied all the conditions required to be reinstated to quotation.

This includes providing an update on the past fraud and mismanagement issues that have impacted Phoslock and the full disclosure of any known ongoing investigations.

In respect to the fraud and mismanagement, the company commented:

As indicated in the November Announcement, the Company self-reported the suspected fraud, foreign bribery and mismanagement issues identified by current management and entered into an Investigation Cooperation Agreement (ICA) with the Australian Federal Police (AFP) which requires the Company to engage cooperatively with the AFP.

Management advised that its engagement with the AFP is ongoing and it is committed to providing proactive and fulsome cooperation with authorities. It highlights:

Proactive and fulsome cooperation will be an important factor for the Commonwealth Director of Public Prosecutions (CDPP) when deciding whether or not to prosecute the Company or offer it a Deferred Prosecution Agreement should that option become available under Australian Law. Even if the CDPP ultimately decides to prosecute the Company, proactive and fulsome cooperation will also be a significant mitigating factor for sentencing purposes in respect of penalties to be imposed on PET.

However, it has warned that potential penalties could put the company’s financial performance and position at risk. It said:

There is a risk that the Company will be exposed to judgments, fines and penalties arising from regulatory activity including the AFP’s investigation and ASIC’s inquiries that may have an adverse impact on its financial performance and financial position.

And let’s not forget that class action firms will likely be licking their lips at these developments. The company warned:

[F]ollowing the fraud and mismanagement issues, the Company has been, and continues to be, exposed to a higher risk of being involved in proceedings, claims and disputes, whether initiated by the Company or persons previously involved with the Company’s affairs.

All in all, the company is in a very messy position, so it isn’t at all surprising to see the Phoslock share price crashing lower today.

The post Here’s why the Phoslock share price just crashed 80% appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why is the Newcrest share price getting hammered on Friday?
• 5 reasons I wouldn’t touch Shiba Inu with a 10-foot pole
• Why is the Liontown share price tumbling 5% today?
• AGL share price slides amid shareholder revolt
• The NAB share price has gained 10% in 3 months. Too late to buy?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/pKetvfw

The Newcrest Mining Ltd (ASX: NCM) share price is taking a beating today.

At the time of writing, shares in Australia’s largest gold mining company are down 2.4% to a near multi-year low of $16.69.

In comparison, the S&P/ASX 200 Index (ASX: XJO) is in the red by 0.99% following the continued market rout on Wall Street overnight.

Why is Newcrest losing its shine today?

Investors are driving down the Newcrest share price following a slump in gold prices overnight.

The precious metal broke under the US$1,700 barrier for the first time in two months to currently trade at US$1,660 per ounce.

Bond yields rose across the board, with the US two-year treasury rate lifting by 8 basis points to 3.87%. This is the highest it has been since 2007.

The US 10-year treasury is at 3.45%.

A mixed batch of economic data came through on Thursday night, which included soft retail sales despite fewer jobless claims.

The US Federal Reserve looks more than likely to lift interest rates to as much as 100 basis points at its meeting next week.

Evidently, this has sparked a sell-off across the yellow metal as investors switch to safer asset classes.

The central bank’s chair, Jereme Powell, has previously said that he is determined to cool inflation despite bringing pain to consumers.

Earlier this week, the release of the consumer price index report for August showed inflation rose by 0.1% on a monthly basis.

This means inflation is up 8.3% annually.

Also heading south today is the S&P/ASX All Ordinaries Gold Index (ASX: XGD), which is down 3.9%.

Newcrest share price summary

The Newcrest share price has fallen 32% in 2022.

With Newcrest shares losing ground today, it is around 1% of its multi-year low of $16.56 earlier this month.

Based on today’s price, Newcrest commands a market capitalisation of approximately $15.27 billion.

The post Why is the Newcrest share price getting hammered on Friday? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Friday
• Why is the Newcrest share price losing its shine on Wednesday?
• 5 things to watch on the ASX 200 on Monday
• Why is the Newcrest share price beating the ASX 200 on Friday?
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/emN2iJD

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Shiba Inu (CRYPTO: SHIB) hit almost every investor’s radar in 2021 after speculators drove it to a 43,800,000% gain for the year. It’s one of the greatest returns in the history of finance — a perfectly timed investment would have turned a mere $3 into over $1 million. 

But the tide has since gone out, and Shiba Inu hasn’t evolved to deliver any real use cases. As a result, it has declined in value by 64% in 2022 so far. Despite the steep drop, here are five big reasons I still wouldn’t be a buyer. 

1. Shiba Inu is unregulated

The first reason to stay away from Shiba Inu — and this goes for most cryptocurrencies — is that it’s completely unregulated. Ironically, that’s one reason some investors choose to own it, because they feel it keeps them outside of the traditional monetary system. But there can be significant consequences to that approach.

For example, if Shiba Inu tokens are lost or stolen, there’s virtually no recourse for the holder whatsoever. On the other hand, up to $250,000 worth of cash in a U.S. bank account is automatically insured by the Federal Deposit Insurance Company (FDIC); in other words, it’s guaranteed by the government should anything happen. 

It’s probable that holders of TerraUSD, a stablecoin that recently shed almost all of its $18 billion valuation, would have appreciated a government-backed initiative to recover their losses.

2. Regulations are coming

You might think this is contradictory to the first point, but the second reason to avoid Shiba Inu is because regulation is inevitable. After a string of high-profile collapses in the cryptocurrency markets (like the one mentioned above), the U.S. government is more aggressively pursuing new laws to protect investors.

Shiba Inu holders (and crypto holders broadly) will soon lose their ability to remain anonymous, because their brokers and exchanges will be required to report all client trading activity to the Internal Revenue Service for tax purposes beginning in 2023. In addition, the majority of cryptocurrencies likely fit the legal definition of a financial security, which could soon place a heavy compliance burden on brokers and exchanges, and that will increase trading costs for customers.

Put simply, more regulation is a net positive for consumers, but it would also strip away many of the reasons people want to own tokens like Shiba Inu. If the subset of the population who currently find Shiba Inu appealing suddenly no longer do, then it might be the final nail in the coffin for the meme token. 

3. Neither consumers nor businesses want to use Shiba Inu tokens

The ultimate goal of most cryptocurrencies is to become a means of payment that performs better than traditional money. Theoretically, that would ensure sustained price gains because people would constantly be transacting in the tokens, giving consumers and businesses an incentive to own them. But so far, not even crypto market leader Bitcoin (CRYPTO: BTC) has garnered mass adoption, and Shiba Inu is lightyears behind. 

Roughly 7,879 businesses accept Bitcoin as payment worldwide, but a mere 659 accept Shiba Inu, and they’re mostly small, obscure merchants. Given the significant return Shiba Inu delivered in 2021, followed by its subsequent collapse in 2022, how many businesses could manage their cash flow if they transacted in such a volatile currency? Probably none. 

As a result, it’s unlikely Shiba Inu’s merchant base will grow materially anytime soon.

4. Shiba Inu has a supply problem

Now that it’s been established that Shiba Inu is merely a speculative plaything, here’s the fourth reason I wouldn’t touch it with a 10-foot pole: It’s not even good at that. There are currently 589 trillion Shiba Inu tokens in circulation, which is why they trade at a price of $0.000012 each instead of something more typical, like $1. 

If Shiba Inu did trade at $1 per token, it would be valued at $589 trillion, making it the most valuable asset on Earth. It would be worth 235 times more than iPhone maker Apple Inc. (NASDAQ: AAPL), which is currently the largest company in the world, with a market capitalisation of $2.5 trillion. 

Shiba Inu’s enormous supply is therefore a barrier to it ever reaching a significantly higher price per token. As speculators have slowly realized the token is likely mathematically banished to a life with five zeros in front of its price, they’ve gradually stopped calling for further meteoric price increases to $1 and beyond. 

5. I’m not feeling the burn

To solve the above supply issue, the Shiba Inu community is working together to remove tokens from circulation by “burning” them, which organically increases the price per token. This happens by sending tokens to a dead wallet where they can never be accessed again. The easiest way to participate is to simply send tokens to the aforementioned wallet, but that’s no fun.

Shiba Inu holders can also listen to a specific music playlist where the royalties are partially burned, or they can buy coffee from the Shiba Coffee Company, which burns some of the proceeds. Then there’s the new Shiba Inu metaverse, where users who purchase virtual land using the Ethereum (CRYPTO: ETH) cryptocurrency can pay a fee in Shiba Inu to rename their plots and, you guessed it, that fee is burned. 

But the burn rate has been incredibly slow so far. If holders are hoping to see their tokens reach $1 through the burn mechanism, they might be waiting more than 10,000 years. And, even if it gets there, it won’t change the value of their holdings. Each Shiba Inu investor will simply own fewer tokens at a much higher price, so the net worth of those tokens will remain exactly the same.

Therefore, while this feels like a positive solution, it will have little real impact for investors.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 5 reasons I wouldn’t touch Shiba Inu with a 10-foot pole appeared first on The Motley Fool Australia.

(function() { function setButtonColorDefaults(param, property, defaultValue) { if( !param || !param.includes(‘#’)) { var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0]; button.style[property] = defaultValue; } } setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’); setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’); setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’); })()

More reading

• Why Ethereum is diving today
• Will the Ethereum Merge leave the crypto at greater risk of hacking?
• Why did the Bitcoin price just dip below US$20,000?
• Why you should buy Block stock (and it’s not Bitcoin)
• As stocks swoon, can crypto get its mojo back?

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Bitcoin, and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

from The Motley Fool Australia https://ift.tt/gEIHtPR

The Liontown Resources Limited (ASX: LTR) share price certainly isn’t roaring today.

In morning trade, the lithium developer’s shares are down 5% to $1.73.

Why is the Liontown share price falling?

The Liontown share price is tumbling on Friday despite there being no news out of the company.

However, it is worth noting that Liontown isn’t the only lithium share that is trading lower today. In fact, the lithium industry is a sea of red today.

Fellow lithium shares Allkem Ltd (ASX: AKE), Core Lithium Ltd (ASX: CXO), and Pilbara Minerals Ltd (ASX: PLS) are all down by similar margins at the time of writing.

What is driving the selling?

The catalyst for the selling appears to have been a poor night of trade on Wall Street for higher risk shares.

In addition, lithium giant SQM saw its shares lose 8% of their value last night. This followed news that it will be spending US$1.5 billion to cut its extraction of brine in half by 2030.

According to Reuters, SQM’s Salar Futuro plan will modernise its process of evaporation and brine extraction, improve operating yields, and adopt the use of seawater via a desalination plant.

This follows a commitment made in 2020 in response to criticism over its brine usage to make a 50% reduction in the brine it pumps to mine lithium in the vast Atacama salt flat in northern Chilean.

Though, given that Liontown’s Kathleen Valley Lithium Project is in Western Australia and doesn’t use brine, this development seems unlikely to have any impact on it.

The post Why is the Liontown share price tumbling 5% today? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why is the Liontown Resources share price down 5% today?
• When will the Liontown share price start roaring?
• Liontown share price falls despite ‘milestone’
• Brokers name 3 ASX lithium shares to buy
• Why is the Global Lithium Resources share price rocketing 27% this week?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/qc7Emno

The AGL Energy Limited (ASX: AGL) share price is on the move this morning, currently trading down at $7.07 apiece.

Trading activity in AGL shares comes following fresh news a shareholder revolt forced the withdrawal of its next appointed chair.

In broad market moves, the S&P/ASX 200 Financials Index (ASX: XFJ) is flat from the open on last check.

ANZ still facing internal turmoil

The country’s oldest energy retailer was set to appoint one Paula Dwyer, former director of Tacorp and director of ANZ, as its new chair following the absence of former chairman Peter Botten.

However, the decision was met with immediate angst from the company’s largest shareholder, Grok Ventures, owned by tech billionaire Mike Cannon-Brookes.

Whilst AGL was set to appoint Dwyer on Wednesday, it’s understood that up to 4 institutional shareholders in the company opposed the move, resulting in Dwyer withdrawing the application.

Grok Ventures in particular was concerned with Dwyer’s potential appointment, “given its view the company needs to be fundamentally rebuilt to extract value for shareholders from the energy transition,” The Australian reports.

Superannuation fund Hesta and investment manager Martin Currie are also understood to have been against the proposal, The Australian said.

Whilst the news wasn’t deemed price sensitive at all, AGL shares started the session down on Friday.

As to the market’s reaction to the news, we’ll have to wait and see, as the AGL share price has had one of its best years in the past 5 with the commodity boom in 2022.

It doesn’t erase the tremendous erosion of value that has been exhibited on the chart since 2018 however, as noted on the chart below.

The post AGL share price slides amid shareholder revolt appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• What’s going on with the AGL share price today?
• 5 things to watch on the ASX 200 on Tuesday
• The AGL share price has tumbled 16% in a month. What’s next?
• Are AGL shares offering a bigger final dividend than Origin this year?
• Broker tips 22% upside for the AGL share price

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/TowzYal