The Motley Fool's Weekly Editors' Picks
Fools were out and about this past week in an investing world jam-packed with actions and ideas. Here are three articles you might find useful as you decide how to invest your money.
These 3 Mistakes Have Cost Me Tens of Thousands of DollarsMany investors would be (1) appalled to know how much money their mistakes have cost them and (2) ashamed to admit their missteps to the world. But Fools aren't run-of-the-mill investors. They make mistakes just like everyone else, but they also go the extra step to learn from them. Fool Adam Wiederman stepped up to the plate this week to talk about three mistakes that have taught him valuable lessons.
The blunder of anchoring to a stock's recent success and high P/E ratio came by way of Baidu (NAS: BIDU) , the Chinese answer to Google. In 2007, Baidu's stock "was up nearly 150% over the past year," Adam wrote. "And its price-to-earnings ratio was well over 100. As a stubborn 'value investor,' I wrote off the stock completely." Yet Baidu has grown at a five-year rate of 77%, and analysts predict growth of 47% annually.
With Netflix (NAS: NFLX) , Adam bought shares and then got so caught up in making elaborate spreadsheets and running numerous discounted cash flow analyses that he lost sight of the fact that it's hard to predict "what a much-loved, high-growth company is capable of -- or how the market will reward its success." He sold at $43 a share in 2009. "Regrettably, Netflix went on to trade as high as $304.79 this past summer," Adam wrote. "Meaning this mistake forced me to miss out on as much as a 914% gain."
Read the article to get Adam's full insight.
How Natural Gas Becomes a Game ChangerAs Fool editor/analyst Austin Smith notes, natural gas currently is cheap, plentiful, and an exciting sector for investors. But jumping in willy-nilly is no good. So Austin turned to Fool industrials editor/analyst Brendan Byrnes for a look at how to play the opportunity.
Natural gas is currently cheap and abundant, and companies are therefore working more aggressively to make the modifications necessary to use it as vehicle fuel, Brendan said. He homed in on a recent announcement of a collaboration between General Electric (NYS: GE) and Chesapeake Energy (NYS: CHK) to develop infrastructure to accelerate the adoption of natural gas as a transportation fuel.
As part of this plan, Chesapeake will deploy more than 250 of GE's "CNG In A Box" fueling systems across the United States through 2015. That's a significant jump, as there are currently fewer than 400 natural gas fueling stations in the country, Brendan noted. GE and Chesapeake are getting the ball rolling. "We like to see this," Brendan said. "We think it could be a major fuel of the future."
Chesapeake, the nation's largest producer of natural gas, curtailed its daily production in response to dropping prices. It's also partnered with 3M to develop advanced CNG fuel tanks.
Watch the video to hear more about how natural gas becomes a game changer.
Are America's Banks Still Too Big to Fail?Living wills aren't just for people. Fool analyst John Grgurich reports that the world's 29 biggest banks are supposed to be putting together plans that will provide for an orderly shutdown in the event of another crisis. "But a new survey reveals that only one of the 29 has done so," John wrote. "That's bad news for the rest of us. Some experts question whether it's even possible to resolve massive interconnected banks with divisions spanning across multiple borders."
In the U.S., the FDIC is calling for banks to put together a "recovery" document outlining their current position and a "resolution" plan that details how to wind up the business in case of bankruptcy. Banks needing to get this work done include "too-big-to-fail" institutions Bank of America (NYS: BAC) , Wells Fargo, Citigroup, Goldman Sachs, and JPMorgan Chase.
"Banks facing two or more regulators have a legitimate gripe, but have to push on with as much urgency as possible, because no one wants a bunch of agitated bankers and sweaty government officials making seat-of-the-pants decisions the rest of us have to live with," John wrote.
Read the article to get all of John's insight into whether America's banks are still too big to fail.
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At the time this article was published Fool online editor Kris Eddy owns no shares of any stocks mentioned in this article.The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, and Google and has created a covered strangle position in Wells Fargo.Motley Fool newsletter serviceshave recommended buying shares of Baidu, Chesapeake Energy, Wells Fargo, Google, 3M, Netflix, and Goldman Sachs, as well as creating a diagonal call position in 3M. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool'sdisclosure policylikes sparkly things.
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