cancel
Showing results for 
Search instead for 
Did you mean: 
     
Highlighted
Participant ○○

Amazing Stock market

I just noticed - for 1 year (not ytd and not from peak) SP500 is up 3% and Nasdaq is up 19.49 %.

That is pretty decent for any normal year.

It is almost like Covid never happened. 

0 Kudos
11 Replies
Highlighted
Frequent Contributor

Re: Amazing Stock market


@waffle wrote:

I just noticed - for 1 year (not ytd and not from peak) SP500 is up 3% and Nasdaq is up 19.49 %.

That is pretty decent for any normal year.

It is almost like Covid never happened. 


Here is a better stat:

20% of market cap of sp 500 co consist of 5 tech stocks: AMZN, AAPL, FB, GOOG and MSFT which is why Nasdaq is up 19.49%.  Market cap of each stock is over $1T. 

 

Highlighted
Frequent Contributor

Re: Amazing Stock market

         waffle - it also is really a 1% problem. Smart money thinks long term, traders are gamblers. If no unknown develops it looks like sale prices are slowly disappearing with this one. 

Highlighted
Contributor ○○

Re: Amazing Stock market


@Intruder wrote:

@waffle wrote:

I just noticed - for 1 year (not ytd and not from peak) SP500 is up 3% and Nasdaq is up 19.49 %.

That is pretty decent for any normal year.

It is almost like Covid never happened. 


Here is a better stat:

20% of market cap of sp 500 co consist of 5 tech stocks: AMZN, AAPL, FB, GOOG and MSFT which is why Nasdaq is up 19.49%.  Market cap of each stock is over $1T. 

My question is, are FANGS the tree that grows to the sky or the balloon filled with...? Well my good manners won't let me say, but you know.


 

Highlighted
Frequent Contributor

Re: Amazing Stock market


@Intruder wrote:
Here is a better stat:
20% of market cap of sp 500 co consist of 5 tech stocks: AMZN, AAPL, FB, GOOG and MSFT which is why Nasdaq is up 19.49%.  Market cap of each stock is over $1T. 

Which is why I am building up exposure to mid caps in the most boring way — an index fund, VIMAX. MC index funds don’t suffer from abnormally outsized positions at the top.

I am still participating in the LCG expansion. But I see mid caps as a way to diversify the portfolio a bit... maybe even boost long term returns.

0 Kudos
Highlighted
Frequent Contributor

Re: Amazing Stock market


@rhythmmethod wrote:

@Intruder wrote:

@waffle wrote:

I just noticed - for 1 year (not ytd and not from peak) SP500 is up 3% and Nasdaq is up 19.49 %.

That is pretty decent for any normal year.

It is almost like Covid never happened. 


Here is a better stat:

20% of market cap of sp 500 co consist of 5 tech stocks: AMZN, AAPL, FB, GOOG and MSFT which is why Nasdaq is up 19.49%.  Market cap of each stock is over $1T. 

My question is, are FANGS the tree that grows to the sky or the balloon filled with...? Well my good manners won't let me say, but you know.


 


What would you substitute for the FAANGS to power up the economy in the aftermath of the Decline resulting from corona virus to restore the GDP and Full employment? The manufacturing sector? Airlines? Autos? Travel and leisure? Retail? real estate?

In addition to the fab 5 you can add pharma, QQQ, HD, LOW, WMT, VZ and T as ground gainers for the post covid 19 -WFH economic restoration. And of course there will be the old standbys of every economic recovery- transportation and integrated oil co such as XOM, CVX, COP.

0 Kudos
Highlighted
Frequent Contributor

Re: Amazing Stock market


@chang wrote:

Which is why I am building up exposure to mid caps in the most boring way — an index fund,


 

Boring is good when it comes to investing. If someone wants excitement, they should find an alternative to finding it in investing.

Highlighted
Participant ○○

Re: Amazing Stock market

FAANGM are the new boring.

Specially Apple and Microsoft are literally new value stocks. May be Amazon too. What can be more boring that being a retailer. (other than waste management)

Buffett owns Apple and would have owned MSFT but I think once he mentioned his close personal friendship with Bill Gates as reason not to - to avoid any insinuations. He is selling Financials. 

0 Kudos
Highlighted
Contributor ○○

Re: Amazing Stock market


@waffle wrote:

(not ytd and not from peak)...

Fair market, not "amazing" from my perspectives though.  Just me.

0 Kudos
Highlighted
Frequent Contributor

Re: Amazing Stock market


@waffle wrote:

FAANGM are the new boring.

Specially Apple and Microsoft are literally new value stocks. May be Amazon too. What can be more boring that being a retailer. (other than waste management)

Buffett owns Apple and would have owned MSFT but I think once he mentioned his close personal friendship with Bill Gates as reason not to - to avoid any insinuations. He is selling Financials. 


AAPL has always been a value stock. Back in the day PE was 9-12. Today it’s 24. Closed at 319 Friday. MSFT was a value stock for many years when Ballmer was CEO. On Feb 24, 2014 when Ballmer was fired stock was at 34. Yesterday it closed at 183.75. PE is 32.  Both of these PEs are low compared to AMZN whose PE is 123.39 as it hit a High of 2446. 

what you think are boring Stocks, I regard as very profitable investments.

Highlighted
Participant ○○

Re: Amazing Stock market

Many people think FAANGM are expensive and pullback is natural after such a run. I also think so.

But no one has any objective reason on why they think FAANGM are expensive.

I sold google around 500 thinking it was too expensive. I thought apple at 150 was too expensive, luckily I did not sell because Buffett had bought it and he is presumably a value investor. I also thought no company will cross 1 T market cap.

 how do you guys reason about what is expensive and what is not? Is it just feeling or are there any measures?

0 Kudos
Highlighted
Frequent Contributor

Re: Amazing Stock market

       waffle - first of all if your going to own a stock long term, over 5 years say, it doesn’t really matter when you buy it that much. If your retired things just went on sale but you might have been afraid they would go lower. If your just a trading gambler just keep “thinking” and throw the dice. You don’t need to know real facts.

        The point is if you have a plan it fits long term or it doesn’t. I’ve owned MSFT about 30 years, AAPL on and off for 30 years, AMZN about 10 years all bought at high PE’s. I don’t want to give numbers but those capital gains alone amount to probably 2/3 of our wealth because they were recognized as game changers. We totally disregarded PE’s. Have a major market swoon and everything is cheap (er). Amateurs flee to MM funds and this time the smart money fled to tech. The big winners this time.
       
         Most of the top growth funds own these types of stocks as top holdings. That’s the only fact I ever needed. The smart money moves the market over time especially now when the amateurs have fled to MM funds. Just emulate them for value, core or growth individual holdings in proportions you can live with and you’ll do fine long turn. The professionals do all the research and thinking for you. With patience and time it’s hard to lose money plus easy to beat MM returns.

Announcements

Morningstar is here to help you respond to the Coronavirus crisis.