Finimize - 📖 Taking a leaf out of Buffett's book

Hi Reader, here's what you need to know for February 22nd in 3:05 minutes.

🤩 Warren Buffett thinks you should be fearful when others are greedy, and greedy when others are fearful. So join 7investing’s Simon Erickson for Do Recessions Have A Silver Lining? on March 8th, and find out why today’s hair-raising markets could have savvy investors working up an appetite. Get your free ticket

Today's big stories

Walmart’s cautious outlook made investors forget its bumper results
Here’s where Buffett, Soros, and Elliott have been investing – Read Now
Eurozone business activity went from strength to strength this month

The Best Is Behind

What’s Going On Here?

Walmart reported strong quarterly results on Tuesday, but it was the firm’s unpromising outlook that grabbed investors’ attention.

What Does This Mean?

The world was in a funk last quarter, but Walmart soldiered on. See, shoppers might have been shunning nice-to-haves like electronic goods, but the firm’s grocery offerings kept the aisles full of customers. And with the retail colossus cutting prices in a bid to sell off last year’s overstocked inventory, those bargains didn't just bring people through the doors: they had those doors practically swinging off the hinges. All in all, sales at US stores open longer than a year grew by 8%, which helped overall revenue and profit sail past expectations. Mind you, investors still ditched their shares initially when they caught wind of Walmart’s outlook: that underwhelming forecast suggested that annual profit could fall for the second year in a row.

Why Should I Care?

Zooming in: Imperiled profit.
Those worries could be well-founded. Last quarter's sales were propped up by low-margin merchandise like groceries and discounted goods, which could explain why profitability took a dip. What's more, consumer savings rates are currently hovering at around half their pre-pandemic levels, meaning that customers probably won’t start splashing the cash anytime soon. Add in price hikes from Walmart's suppliers, and it’s no surprise the firm thinks its profit margins could be in danger.

The bigger picture: Retail’s reeling.
Walmart’s expecting trouble, and Home Depot already has it in spades. On Tuesday the firm announced that it missed sales expectations for the first time since the pandemic last quarter, and predicted that its sales won’t grow at all in 2023. Putting the forecasts of the two titans together, it doesn’t take a genius to work out that retail as a whole could be a little shaky this year – which might be why an index tracking some of the biggest companies in the retail space fell when the news broke.

You might also like: How you can work out what Walmart’s stock is really worth.

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Analyst Take

You Might Be Going All-In On Stocks, But Buffett, Soros, And Elliott Haven’t Been

By Russell Burns, Analyst

Retail investors have been diving headlong into stocks this year.

But with as many signals pointing up as down in the market, you might be tempted to break from the pack and spread your money around to other assets.

I took a look at what Elliott Investment Management, Soros Fund Management, and Warren Buffett’s Berkshire Hathaway have been doing – and it turned out that retail investors could learn a lot from those big players’ strategies.

That’s today’s Insight: where these three investment giants have been putting their money.

Read or listen to the Insight here

Investing fees don’t need to be so complicated

If you like keeping things simple, you could love Interactive Investor – or ii, if you’re a regular.

See, ii is known for boasting a wide range of flat-fee investing plans, each with a fixed monthly subscription, that have been more cost-efficient for those with hefty investment pots.

And now ii’s unveiled the brand-new Investor Essentials plan, which lets you invest up to £30,000 for a fixed fee of £4.99 a month – ii’s cheapest plan yet.

You’ll get to pick from the biggest range of UK and international investments on the market, all while enjoying the bliss of free regular investing.

And get this: if you hit that £30,000 threshold, you’ll automatically graduate to ii’s most popular plan for just £9.99 a month – no slaps on the hand or hidden excess fees in sight.

Simplify your investing fees with ii.

Find Out More

For £4.99 you get Free regular investing, additional trading fees do apply. The value of your investments may go down as well as up and international investments may also be affected by currency fluctuations which might reduce their Sterling/GBP value. You may not get back all the money that you invest. If you are unsure about the suitability of an investment product or service, you should seek advice from an authorised financial advisor.