Login | October 20, 2026
What's Beta?
THE MOTLEY FOOL
Published: October 20, 2026
Q. What's a stock's beta? -- A.G., Williston, Vermont
A. It's a measure of its volatility. A beta of 1.0 reflects a stock that moves pretty much in tandem with the overall stock market. If the market rises or falls by 10%, so will the stock (roughly). A beta below 1.0 reflects lower volatility, and a beta above 1.0 reflects higher volatility. So if the market falls by 10%, a 0.6-beta stock might drop only 6%, while a 1.5-beta stock might fall by around 15%.
Q. Which CEOs' annual letters to shareholders are worth reading? -- R.C., Millcreek, Utah
A. It's important to keep up with your own holdings, so try to read the CEO letters for the stocks you own. They won't be equally impressive, and if any seem to be avoiding tough topics or casting blame, that could be a red flag prompting you to reconsider that holding.
Warren Buffett's 60-some letters are considered by many the gold standard of CEO letters, as they're candid, readable and educational. You can find them on the Berkshire Hathaway website at BerkshireHathaway.com. There you'll also find letters from Buffett's successor, Greg Abel.
Other CEOs whose letters are widely read include Jamie Dimon of JPMorgan Chase, the Tisch family of Loew's, Larry Fink of BlackRock, Jane Fraser of Citigroup, Tom Gayner of Markel Group, Seth Klarman of Baupost Group, Howard Marks of Oaktree Capital Group, Lee M. Shavel of Verisk Analytics and Prem Watsa of Fairfax Financial Holdings.
You can learn a lot about the economy and various industries by reading a wide range of past and current CEO letters to shareholders. Search for some of these and/or other CEO names along with "letter to shareholders" to find their writings.
Fool's School
Different Kinds of Public Companies
There are many kinds of publicly traded companies, and you might want to invest in some while avoiding others. Here are some common categories:
-- Blue chip stocks are tied to established and financially stable companies, such as Berkshire Hathaway, Boeing, Johnson & Johnson, JPMorgan Chase, Microsoft, PepsiCo, Procter & Gamble, Visa and Walmart.
-- Income stocks pay dividends to shareholders, typically via quarterly cash payments. They can be great for retirees as they generate regular income, but investors of all ages can profit from them.
-- Value stocks are ones that appear undervalued, thus offering a margin of safety. Famous investors such as Warren Buffett have favored the value investing approach.
-- Growth stocks are tied to companies growing at a faster-than-average rate. They can be appealing, but they can also be overvalued. When the market pulls back, they can fall harder than other stocks.
-- Cyclical stocks tend to rise and fall along with the economy and include carmakers, travel-related companies and luxury goods makers. When there's a recession, many consumers will put off buying a new car or taking a big trip.
-- Defensive stocks are ones you'd likely want to own during a market downturn. They are not cyclical and are often less volatile than other stocks. They include utilities, grocery chains, consumer staples companies and pharmaceutical companies. After all, if the economy sours, you'll still need to pay your utility bills and buy groceries, shampoo and medications.
-- Speculative stocks tend to be volatile and riskier-than-average; these include early-stage biotechnology companies, mining companies and specialists in emerging technologies. Penny stocks are also speculative -- and generally extra-risky.
Keep in mind that some stocks will fit several categories. Coca-Cola, for example, is a blue-chip defensive stock and a dividend-paying income stock and, at times, an undervalued value stock.
My Dumbest Investment
Bitcoin Mining Regrets
My most regrettable investment ever was in bitcoin mining companies. -- A.T., online
The Fool responds: The world of cryptocurrencies is complex and not for the faint of heart. There are lots of cryptocurrencies, of course, and you might invest in some of those; the largest ones recently included bitcoin, ethereum, Tether, Binance coin and XRP. But just as you might invest in gold itself or in gold-mining businesses, you can invest in cryptocurrencies themselves and/or in companies that "mine" for crypto. With bitcoin, for example, miners engage in a complex process that can reward them with bitcoin if they create new blocks that get added to the blockchain.
It's costly to run the hardware to engage in bitcoin mining, so many people leave that process to bitcoin mining companies and then invest in those companies. Not all of those miners will prosper, though, so there is certainly risk -- as you experienced. Also, historically, crypto prices have been quite volatile; many who got in early have done well, but many with poor timing have ended up with big losses. Only invest in cryptocurrencies once you have a solid understanding of how it all works.
(Do you have a smart or regrettable investment move to share with us? Email it to TMFShare@fool.com.)
Foolish Trivia
Name That Company
I trace my roots back to 2006, when I was founded by some guys who had also built Expedia. They didn't like that so much information about homes for sale was only available to real estate agents, so they made much of it available to all -- including, initially, estimated home values for 40 million homes. I launched rentals in 2009. I had my initial public offering (IPO) in 2011. By 2015, I had 150 million unique monthly visitors. My name is a mixture of a word for a cushion and a word for lots of money. Who am I?
Last Week's Trivia Answer
I trace my roots back to 1994, when I came to life as a rechargeable battery maker. I'm now the largest seller of fully electric vehicles, having surpassed Tesla. I sold a record 4.6 million vehicles in 2025 (General Motors sold 4.5 million), and my CEO is aiming to make me the world's largest automaker in just five years. I'm involved in automobiles, rail transit, new energy and electronics, with operations in China, Japan, the United States, Canada, Brazil, Hungary and India. I'm a Fortune Global 500 business, with the hope of helping each customer "build your dreams." Who am I? (Answer: BYD)
The Motley Fool Take
Verizon for Dividends and Growth
Verizon Communications (NYSE: VZ) dominates the U.S. telecom industry, which is an attractive sector for dividend investors due to its stability. These days, mobile phones and internet access are necessities for customers, so that generates a consistent stream of income for the company and its shareholders.
Verizon has increased its dividend for 20 straight years, and its payout recently yielded a fat 5.7%. The company boasts a massive recurring revenue base from its millions of wireless and broadband subscribers. That provides it with the cash flow to invest in maintaining and expanding its network, while also returning cash to shareholders.
During the first half of this year, Verizon generated $18.4 billion in cash flow from operations, easily covering its capital expenditures ($8.2 billion) and dividend ($5.9 billion). It used the remaining cash to repurchase shares ($3.5 billion) and strengthen its balance sheet. Verizon is on track to generate over $21.5 billion in free cash flow after capital expenditures this year, and its growing free cash flow should support future dividend increases.
Verizon has not been growing briskly, but its business is solid and stable. It's likely to generate substantial passive income to long-term investors. (The Motley Fool recommends Verizon Communications.)
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