(I received this in an email stating that this was posted on X.) Maybe check your holdings.
° Amazon, Apple, Microsoft, Google, and Nvidia shares have rallied by a massive 27% year to date.
° This accounts for most of the S&P 500's 11% year-to-date gain.
° By comparison, the remaining 495 companies have only seen a 6% gain this year.
° Furthermore, the equal-weighted S&P 500 index is up just 5% in 2024.
° Currently, the 6 largest S&P 500 components reflect a record ~30% of the index.
° Truly remarkable.
Comments
My sense has been that there’s still some “reasonable” value out there if you get away from the big hitters like the ones you cited. A “sense” isn’t the same as a “fact” and I could be wrong. Nor would I want to direct anyone to specific areas I think might still hold value. Another thing … If the heavy hitters take a tumble, they’d probably bring down a lot of other stuff even if it’s reasonably priced.
I posted last night how NVDIA has zoomed 150% (or some crazy number) YTD and has passed Apple now in value! Link
A coworker asked me for a stock tip in 1995 or 1996.
I disclosed that I only invested in mutual funds and was not a stock expert.
I suggested he consider Microsoft which recently released Windows 95.
IIRC, he invested ~$10k initially in MSFT and another ~$10k a few weeks later.
My coworker left the company a short time later and he didn't even buy me lunch for the stock tip!
MSFT got hammered in the Dot Com bubble and it also performed poorly under Steve Balmer.
Still, if someone invested $10k in MSFT on 01/02/1996 and held through yesterday
(experiencing a max drawdown of ~70% along the way), Microsoft stock would be worth over $1.2mm.
Did I purchase MSFT - of course not!
MSFT Statistics
I recall when Steve Jobs returned to Apple as interim CEO in late 1997.
Apple's stock price was very low at the time and Jobs brought a lot of energy to the struggling company.
Around this time, I thought Apple might be a good investment opportunity.
If someone invested $10k in AAPL on 01/02/1998 and held through yesterday
(experiencing a max drawdown of ~82% along the way), Apple stock would be worth ~$16mm!
Did I purchase AAPL - of course not!
AAPL Statistics
Oh, and I've lived within 15 miles of Amazon's main corporate headquarters over the past 30+ years.
There were many articles about Amazon published in local newspapers during the 90s.
The company's sales took off like a rocket but profits were elusive during those times.
I believed the stock was consistently overvalued.
Did I purchase AMZN - of course not!
I now regret conducting this exercise as it has triggered a major bout of depression!
We got lucky (not skills) with few stock picks:
Bought lot of Apple when Steve Job introduced iPhone back in the 90’s and the stock has done well.
Started buying BRKB after reading Warren Buffet’s books. When Charlie Munger joined Buffet, we continue to add on every dips. Through Buffet we learn to be humble in order to be a good investor.
With the lately AI craze, we stay within our competency and pick a semiconductor ETF, SMH, instead NVIDA. Even though SMH has 25% NVDA, the rest are “picks and shovels” companies similar to those of the gold mining days. So far the thesis holds up.
Over the years, we have too many loser stocks to list here. Thus, we hire good active managers to run the funds for us. There is something to be said about diversification with just a S&P500 index fund or ETF.
The other interesting thing about your story is how far those now great companies fell before they turned around.
We all remember the winners like that, but nobody talks about WorldCom, Global Crossing etc. They were hot story stocks that just burned up.
AI may revolutionize everything but when will it make people money? Unless you have some information not available publicly, it is impossible to tell when everyone has bought their fill of AI chips.
High-flying stocks also go bust at times as sma3 has mentioned.
That's why I invest in mutual funds / ETFs instead of selecting individual stocks.
I won't hit any "home-runs" but will hopefully avoid unsettling "strike-outs."
How many tech stocks survived the dot-com bubble ?
Can the investors stay put during 80% drawdown?
There is something to be said about having a balanced asset allocation for most years. 2022 was an exception.
Apple's stock price was very low at the time and Jobs brought a lot of energy to the struggling company.”
Recently spent a pleasant day wandering Central Park - but it might well have been anywhere in the country. Try and spot someone who doesn’t have a cellphone / iphone in their hand. Great for navigating an unfamiliar area along with all their other capabilities. And what really blew my mind were toddlers who could barely walk holding them in hand and staring at the screen. How ubiquitous they’ve become. I can still remember the moment Steve Jobs stood on stage and unveiled Apple’s greatest invention. Shoot - few could have imagined their eventual reach. But Jobs likely knew.
[1] h/t to my partner for that brilliant term
As a GenX'er who embraces various types of always-on tech in his life but also remembers a time without it (and is comfortable without it) I have many thoughts on this issue, but that's for another day.....
Ooh, ooh, me, me
Though I have to admit that having a mini-computer (no SIM) in my hand for guidance did recently help me walk to Starbucks in various German towns. (We collect Starbucks mugs in cities we have visited.)
After retiring I refused to even own a "smartphone". We do have one stupidphone though, and that's it. Everywhere we go it seems that almost everyone has their head buried in their smartphones... it's almost like a surreal scene from some science-fiction novel where everyone is being controlled by some evil entity.
What's seems strange is that evidently a fair number of MFO people feel pretty much the same way. I like it here... very comfortable with the MFO community. (Well, maybe except for certain baseball fans.)
”the top three stocks in the S&P 500—Microsoft, Nvidia, and Apple—have accounted for 20% of the index for six days in the past two weeks. May 28 was the first time on record that the S&P 500’s top three stocks were worth more than 20% since at least 2000 …”
”Just 3 Stocks Rule the Market. Why You Should Be Worried.” - Teresa Rivas in Barron’s - June 10, 2024
Wouldn’t ”Index investing” yield even better returns if these 3 accounted for 100% of the S&P?
A recent issue of the "Boundary Waters Journal seemed proud to announce that if you have a "Starlink" equipped phone you can get a signal in the wilderness
They referenced it mainly for first responders and firefighters, but I bet there will be lots of canoeists who use their phones there
Next they will complain they can't charge their phones there but with a solar panel the will be able to
UGH
During the pandemic, these devices made our connection to friends and families so much easier and safer. Our kids were able to see and talk on weekly basis with their 90 years old grandparents through FaceTime. Will see one of the grandparent this summer. The other one passed away a year ago, but we still have those memory.
@sma3, we envy your new canoeing adventure. Many folks have great time navigating the wildness using the tried and true method with maps and compass. The other challenge is the mosquitoes that the Boundary Water is known for.
I think you’re misreading this just a little. The board is internet based. I don’t know of any other way to participate except through some kind of internet-enabled device. I have a MacBook which comes in handy for tax season. Used to need its power for selecting theatre seats, etc online. Now Ipads can do it. Speaking of ipads, I have 2 - an “Ipad Air” for home use and a smaller “ipad Mini” for when I’ll be away from home for more than a few hours. Gosh, the list of regular uses goes on and on - Internet shopping, email, streaming music & video …
(And - ooops - investing)
I can’t speak for the others, but at 78 I can’t quite get used to being “wired” everywhere I go. Wasn’t that way growing up. Don’t want to have a phone ring while relaxing at a beach, driving an auto or riding a bike. So, unless there’s some urgent need to receive calls away from home, I silence the phone function. But I’ve learned not to travel without a phone. It has “saved my skin” on various occasions like encountering car trouble or having to book a flight fast after one was cancelled.
Thanks @Sven for your thoughts. I just didn’t want to be perceived as being against technology.
I have been fortunate in my life time to have made several trips into the BWCA (or BWCAW as it's labeled now). A handful of those trips were made well before cell phones or even SAT phones were in existence. To me the BWCA is called a 'wilderness area' for a reason and you accept that knowing that it's the price you pay for admission. I go there to escape all of societies(?) conveniences and to experience life by one's skills, wits and knowledge. It's glorious.
I can see where it gives many pause however and just within the last month SAT phones were used to summon Search & Rescue assistance for two groups of canoeists HERE. The first ended tragically while the second fared better. My guess is that many more SAT phones will be rented out to canoeing parties in the coming years.
As for cell and/or smart phones, I've always left mine in my vehicle upon entry. Cell service in the BWCA is very spotty at best and most definitely should not be relied upon. Smart phones are good for taking great photo's though and they tend to be small and light weight.
On the trips we have taken with guides, they all have had Sat Phones and guns for emergencies, because they have a responsibility to their customers. We have been camping in wilderness national parks, self guided and had the people next to us admit the had guns. It was not a good feeling and we did not talk politics!
Since 1983, my wife and I and then with son have done 19 trips to BWCA, Quetico or another canoe wilderness in Canada, Algonquin Park. There have no major incidents other tan on badly sprained ankle (mine, fortunately on next to last day) and a fish hook in an arm.
Our last trip was in 2017, when I was 65. Now at 71 I am thinking of buying an Emergency Response Beacon just in case.
That is still not a cell phone. I will use mine to take pictures
My wife's vehicle broke down yesterday outside of exurban Albuquerque. It would have been a tougher situation for her without the cell phone.
Years ago, before kids, we never worried about stuff like that. And we were a little more resilient then,
We love our smart phones and they are ubiquitous in our daily. We view them as a tool and not being enslaved by them. Guess everyone have have different level of usage and sharing, thus our experience differ. We don’t use social media, Twitter and social media in order to avoid being overloaded. Hope this help to explain where I am coming from. Again, I apologize.
It’s been just fantastic watching the evolution of technology over my 78 years. I used to have to compute grades for kids on a big loud clunky mechanical adding machine. Took hours and hours after work at the end of a marking period. Then in about 1975 I bought a simple plug-in desktop calculator at Montgomery Ward for around $100. What a marvel it was. Made my job so much easier. Later - probably in the 80s - I purchased a Commodore VIC-20, my first computer. Fun to play with but close to useless for anything except playing games. Bought an Apple 2-e sometime after that. Big leap. Than in the early 90s my employer bought us all an IBM computer that ran Microsoft. (The trade-off was that we had to commit to a number of hours of in-service training after work.) On and on it goes …
Take care Sir
For sure. At around 10 yrs old I started getting interested in electronics... it was all vacuum tube technology then, of course. I learned all of the basics from the RCA Tube Manual, which was reprinted every year with the latest technology updates. The front section of that manual contained a concise textbook on the basics of vacuum tube technology, and the rear section contained diagrams and parts lists to build lots of interesting stuff that actually worked quite well.
At 18-21 yrs I was an electronics tech in the US Coast Guard, still using the very latest in vacuum tubes, but reading here and there about some marvelous new thing called a "transistor" being developed by Bell Labs.
At 35 yrs there was a new RCA Transistor Manual, which contained concise sections on understanding and building solid-state technology. Transistor radios were really cool.
At 45 yrs I was working for SF Public Safety, and we still had a small amount of very antiquated vacuum tube radio equipment. I was one of the two technicians there who actually knew how to service that stuff. All of the other techs knew only the "solid state" electronics which constituted almost all of our communications equipment.
At 55 yrs we began to see the first inroads of the latest/greatest communications gear now using computers, microprocessors, and this new thing called "software". I was the first in our shop to buy an Apple Mac+, which I used to design the then-new 911/Public Safety Dispatch Center in San Francisco.
At 63 yrs I became the first in our shop to use a newly installed system to centrally monitor and control all of our many remote radio and communications sites, and enhanced that system to include many operations not originally contemplated. That system is similar to those now in wide use to control electrical distribution, water, oil, and gas pipelines, and other public utility systems. Many of those systems are under constant threat from hacking attacks by bad actors. In SF we saw that coming, and while using essentially the same type of technology, no part of our public safety system has any interconnection with the internet.
At 65 yrs I said "enough", and retired. No smart phone, thank you. No wonderful apps to let me do almost anything, including getting hacked every other day by some new bad guys. One stupid flip-phone to use voice and text. A bunch of decent Mac computers to let me do almost anything that I need to, with, so far at least, nothing being hacked.
Now at 85 yrs that's the story of my personal evolution of technology, and I'm quite happy with it.
The progress has been stunning.