Continue to avoid AMC Entertainment; A contrary indicator favoring Walgreens; Positive economic indicators; The U.S. has become the top crude oil producer in the world; Chinese ghost cities; You must be vigilant to avoid scams!

Over the past four days, I've devoted my daily e-mails to covering Berkshire Hathaway's (BRK-B) earnings report and CEO Warren Buffett's annual letter.

If you missed any of those e-mails, you can read them here:

• Monday: Buffett's annual letter and tribute to the late Charlie Munger
• Tuesday: More of Buffett's annual letter
• Wednesday: My analysis of Berkshire's earnings
• Thursday: My updated estimate of Berkshire's intrinsic value

So with that out of the way, let's do a quick catch-up today on several other things...

1) Movie-theater operator AMC Entertainment (AMC) dropped 13% yesterday after reporting disappointing fourth-quarter earnings. (You can read the full release here.)

The stock is now down 91% since I added it to my Short Squeeze Bubble Basket on January 27, 2021 and down 93% since I included it in my Dirty Dozen stocks to avoid on January 4, 2022.

Continue to avoid this stock!

2) A hat tip to Charlie Bilello for flagging this contrary indicator in his latest Week in Charts post...

In at least one instance, a company that was kicked out of the Dow Jones Industrial Average (which consists of only 30 stocks), General Electric (GE), did much better than the stock that replaced it, Walgreens Boots Alliance (WBA):

Now that Walgreens – having performed dismally (down 58% since its addition in 2018) – is being replaced by Amazon (AMZN), maybe it's worth a look...

3) In the same post, Bilello also highlighted an interesting data point that reinforces my view that a recession isn't imminent:

The Conference Board, who previously predicted a recession would begin in Q1/2/3/4 2023 and then Q1/2 2024, is no longer forecasting a downturn.

Why?

6 out of the 10 components in their index have turned positive over the last 6 months, led by the surging stock market.

And here's the relevant chart he included:

4) This is an interesting chart from Visual Capitalist showing how the U.S. has surged in less than two decades to become the top crude oil producer in the world. No wonder Buffett continues to buy Occidental Petroleum (OXY) and Chevron (CVX)...

5) And here's an interesting five-minute video by the Wall Street Journal on China's real estate crisis, in particular its ghost towns:

6) I try to warn my readers about scams, so I've read about dozens of them – but this one takes the cake...

New York Magazine has the story: The Day I Put $50,000 in a Shoe Box and Handed It to a Stranger. Excerpt:

Now I know this was all a scam – a cruel and violating one but painfully obvious in retrospect. Here's what I can't figure out: Why didn't I just hang up and call 911? Why didn't I text my husband, or my brother (a lawyer), or my best friend (also a lawyer), or my parents, or one of the many other people who would have helped me? Why did I hand over all that money – the contents of my savings account, strictly for emergencies – without a bigger fight?

When I've told people this story, most of them say the same thing: You don't seem like the type of person this would happen to.

What they mean is that I'm not senile, or hysterical, or a rube. But these stereotypes are actually false. Younger adults – Gen Z, millennials, and Gen X – are 34 percent more likely to report losing money to fraud compared with those over 60, according to a recent report from the Federal Trade Commission. Another study found that well-educated people or those with good jobs were just as vulnerable to scams as everyone else.

The writer continues by wondering how she could have been such easy prey:

Scam victims tend to be single, lonely, and economically insecure with low financial literacy. I am none of those things. I'm closer to the opposite. I'm a journalist who had a weekly column in the "Business" section of the New York Times. I've written a personal-finance column for this magazine for the past seven years. I interview money experts all the time and take their advice seriously. I'm married and talk to my friends, family, and colleagues every day.

And while this is harder to quantify – how do I even put it? – I'm not someone who loses her head. My mother-in-law has described me as even-keeled; my own mom has called me "maddeningly rational." I am listed as an emergency contact for several friends – and their kids. I vote, floss, cook, and exercise.

In other words, I'm not a person who panics under pressure and falls for a conspiracy involving drug smuggling, money laundering, and CIA officers at my door. Until, suddenly, I was.

Here's another article from CNBC on the same subject: How to avoid the top scam of 2023: The Internet has 'really supercharged' it, expert says. Excerpt:

Consumers lost a record $10 billion to fraud in 2023, and imposter scams were the most prevalent swindle, according to the Federal Trade Commission.

Nearly 854,000 people filed complaints to the FTC about imposter scams in 2023. This represents 33% of the total consumer fraud reports filed to the agency.

Consumers lost $2.7 billion to such scams in 2023, according to FTC data. The average loss was $800.

As the article goes on to say, imposter scams share a basic premise:

Criminals pretend to be someone you trust to persuade you to send them money, or to get information that can later be leveraged for money, experts said.

People may falsely claim to be a romantic interest, the government, a relative in distress, a well-known business or a technical support expert, the FTC said in a recent report.

Fraudsters, often part of sophisticated organized crime networks, may contact potential victims via channels such as e-mail, phone call, text, mobile apps, social media or traditional snail mail.

Comedian John Oliver recently covered a particular type of scam called "pig butchering," which costs Americans $3 billion annually and actually caused a small bank to go under when its CEO fell for the scam and embezzled $50 million.

Here's his 24-minute segment on it: Pig Butchering Scams: Last Week Tonight With John Oliver.

And this NYT article has smart tips for avoiding scams: What Amazon, the F.T.C. and C.I.A. Won't Say When You've Been Scammed.

You must be vigilant to avoid falling for them.

If someone tells you not to tell your spouse, sibling, child, or friend about something, it's a scam!

Assume that any call, e-mail, text, WhatsApp message, instant message, etc. from someone who you haven't met in person (and sometimes even after that – see dating scams) could be a potential scam until proven otherwise!

Best regards,

Whitney

P.S. I welcome your feedback – send me an e-mail by clicking here.