U.S. and global stock markets closed their first negative week across the board, with all the major U.S. indices ending in the red.
The S&P 500 fell 0.30% and the Dow Jones dropped 0.24%. The tech-heavy Nasdaq pulled back 0.19%. The MSCI Emerging Markets Index suffered the worst fate, tumbling 1.92%.
The star of your Smart Money Masters holdings was your most recent pick, Fiat Chrysler N.V. (FCAU), which jumped 9.04% in its very first week in the portfolio. Your other positions showed more muted gains, with George Soros’ Liberty Broadband (LBRDK) continuing its recent rise and jumping 1.71% over the week.
Shares of Fiat Chrysler N.V. (FCAU), a favorite investment of Mohnish Pabrai, surged on Monday after reports that one or more Chinese automakers are trying to acquire the company. Automotive News reported that at least one Chinese automaker has made an offer for FCAU, and several other Chinese automakers may bid to buy all or part of the company.
FCAU’s board rejected the offer, which was at a small premium over FCAU’s then-current market value.
China’s government has been urging big Chinese companies to invest in foreign companies. FCAU is probably the most appealing acquisition target among the major global automakers for the Chinese. Any sale would likely include the Jeep, Ram, Dodge, Chrysler and Fiat brands. The Italian Alfa Romeo and Maserati brands would be spun off, as former FCA subsidiary Ferrari (RACE) was, to keep them under the control of Italy’s Agnelli family, the descendants of Fiat’s founder.
Any bidding war is good news for you, as it inevitably will push FCAU’s stock price higher.
Three of your positions — PayPal Holdings (PYPL), Restaurant Brands International (QSR) and Liberty Broadband Corporation (LBRDK) — all boast double-digit-percentage gains.
PayPal Holdings (PYPL) is now up a whopping 46.3% since my initial recommendation. Carl Icahn has been reducing his position in PYPL gradually in the past week or so, Thus, I am recommending that you raise your stop to $57.25 to lock in at least a 40% gain in the stock.
Kraft Heinz (KHC), Costco (COST), Restaurant Brands International (QSR), BlackBerry (BBRY) and The Priceline Group (PCLN) are all trading below their 50-day moving averages (MA) and are currently HOLDs.
Nicholas A. Vardy