I'm yawning at the current market turmoil; Thoughts on Meta Platforms' recent news – as both a citizen and an investor; A look at AMC Entertainment
1) The war in Iran has created turmoil in the markets...
Oil prices have been volatile, spiking during the initial conflict but falling below $100 per barrel today with news of peace talks.
The S&P 500 Index has been on the same roller-coaster ride. It's up slightly today but down 4% year to date and down 6% from its all-time high in January.
My reaction: yawn.
This is the 32nd time the market has experienced a 5% or greater correction since the generational bottom in March 2009 during the global financial crisis. And five of these declines were more than 20%.
You can see this in the table below from Charlie Bilello's Week in Charts:
Had you panicked and sold at any point since then, you would have missed out on an 848% gain (14.1% compounded annually):
As you can see in the chart above, the past three years have been among the best for the market in recent history.
Do you remember the 10.3% drop in 2023? The S&P 500 was up 26.3% for the year.
The 8.5% decline in 2024? The S&P 500 was up 25% for the year.
The 18.9% crash in April 2025? The S&P 500 was up 17.9% for the year.
Bilello's table below shows the S&P 500's maximum drawdown and total return for every year for the past century. As you can see, the average drawdown is negative 16% – yet the average annual return is a 10% gain:
My message remains the same...
If you hold high-quality stocks, well-managed funds, and/or low-fee index funds, sit tight and ignore the headlines.
If you have some extra cash, you can look to take advantage of the mini sell-off by doing some buying.
Most importantly, don't get sucked into whatever stocks or sectors Wall Street is promoting.
2) Meta Platforms (META) has long been one of my favorite stocks. But as the Wall Street Journal reports, there was some very bad news for the company yesterday:
A New Mexico jury on Tuesday found that Meta Platforms, which runs Facebook and Instagram, was liable for failing to protect young people from online dangers, including sexually explicit content, solicitation and human trafficking.
The jury found Meta liable for misleading consumers about the safety of its platforms and endangering children, under the state's consumer protection laws. The jury ordered a maximum penalty for each violation, totaling $375 million in civil penalties.
The fact pattern is extremely troubling. Prosecutors produced evidence that the company ignored the dangers of its platform, which lets pedophiles engage with children. They also said its platform is intentionally designed to addict children. Meta, of course, denied these allegations.
As the article continues:
In May, the New Mexico trial court judge will hear additional arguments from state prosecutors, who will ask for Meta to pay additional damages. They will also ask for Meta to change its platform, including enacting effective age verification, removing predators from its sites, and protecting minors from encrypted communications that can shield bad actors.
As a parent and citizen, I'm glad that Meta is being held accountable. I'm appalled that it and other social media platforms have run a self-serving, profit-maximizing experiment on humanity, especially young people, with little oversight or regulation.
The results have been calamitous: a surge in anxiety, depression, and self-harm among young people... and an explosion in scams, misinformation, and manipulation by bad actors all over the world.
But as an investor, it's critical to put feelings aside to evaluate businesses, their future prospects, and their stocks' valuations.
That's what allowed me to pound the table on Meta in late 2022. The stock is up more than 500% since then. And it has pulled back from a high of nearly $800 last summer to around $600 today.
At that price, it's trading at only 20 times this year's consensus analysts' earnings estimates. It makes no sense for a business like Meta to trade at this below-market multiple.
(For more on Meta, see my analysis of its most recent earnings report in my January 30 e-mail.)
3) As for stocks to avoid, AMC Entertainment (AMC) is on my mind because my wife Susan and I went to see Project Hail Mary yesterday at one of its theaters.
We couldn't even remember the last time we went to a movie. It used to be a monthly outing for most of our lives, until the pandemic. And the theater was two-thirds empty.
This only reinforced my long-held view that AMC's stock is a zero...
I started warning my readers about AMC at the peak of the meme-stock bubble on January 27, 2021, when I included it as part of my "Short Squeeze Bubble Basket."
I then called the "blow-off top" for the stock on June 3, 2021, the day after the stock hit its all-time high of $625.48.
Since then, it's down more than 99% to an all-time low of less than $1 per share. You don't often see stock charts this ugly:
The company's market cap is down to around $575 million – a tiny fraction of its onerous $7.7 billion net debt load.
And it won't be able to dig itself out. It hasn't generated positive operating cash flow, much less free cash flow ("FCF"), in the six years since the pandemic walloped its business:
To stave off bankruptcy, the company cleverly but cynically took advantage of its meme-stock status and issued tons of shares to gullible retail investors at the peak of the bubble. And it continues to do so, even as the stock has imploded:
As a result, AMC's share count is up 40 times since 2019:
Don't be one of the suckers buying this worthless stock...
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.
P.P.S. Susan and I enjoyed Project Hail Mary – I liked the tech/space fantasy part of it, and Susan commented that "Ryan Gosling is nice to look at for two and a half hours."
Here's a photo of us in front of the theater:
