A brief assessment by Chief Strategist Dave Sekera at Morningstar.
I'm attaching a photo, as I confess I don't know him at all, nor do I follow the investment company in any way. Does anyone know this guy? 😊
He's on a nice growth spurt so far this year and we all know why. But it's better to keep reminding ourselves so we don't fall into the delusion that everything is green. These 3 companies, $AAPL+0.5% $NVDA+3.7% and $AVGO+3.0% account for almost 40% of the increase in market value of the S&P 500 and $SPY-0.4% which is up almost 12%. He rates these three companies as overvalued and recommends selling. Further, when he pokes around a bit, he points out how precarious the situation is because only these 10 companies are powering the S&P 500 index. The three others mentioned are $MSFT-2.4% $AMZN-1.7% $META-10.6% $TSLA+5.0% $AMD+1.3% and $CRM-1.1%
Missing is the popular $GOOG-2.0% and the only one they think is still undervalued.
How do you see it my friends? Prices are high in this sector and the boom around AI is simply here, no doubt about it. On the other hand, those of you who are holding, like me, I probably wouldn't be leaving "frantic" positions. Not on everything, but that's an individual consideration. I personally hold $AAPL+0.5% for which, despite a slight dip now that it has come up with a boatload of news, I see potential for growth. As even mentioned here, it's just Apple, even if more expensive, people will buy it, it has a strong brand. I personally see it making a new ATH here this year. Then I hold $MSFT-2.4%, there it's probably clear who has it at lower prices, it just holds because it's the leader and will be for a long time. The $GOOG-2.0%, well, undervalued to me as the Morningstar strategist states, but you could definitely catch some nice buys under $100. I'm holding it now, I see slower growth here. The $AMZN-1.7% one is definitely not lagging and although also slower, I'm leaning towards growth there too and I don't believe we'll get to the low prices like we did a few months ago. And last on this list I still hold $META-10.6% Here it's hard to say, I believe it could get to the $300 mark but I'm cautious and watching if there should be a hint of a bigger drop. While for many Zuckerberg is not a favorite, like Musk, I like that he has woken up a bit and isn't just looking at his VR one.
The other companies mentioned are not in my portfolio and thus I don't follow them as much. As I mentioned, prices are high and overpriced it may be, I believe, but only time will tell. And how do you feel about what you hold/sold from this list.
There are some good points and some that are a bit against. I don't see a lot of growth there right now either and I would have expected some sort of drop off. If we get to even lower levels than we were last year, that would be a bump. Still no blood flowing in the market yet...
Wow, yes, that would get the blood flowing a lot if we went even lower than last year. I wouldn't give that much of a chance anymore, if they don't call in the debt then yes, but this way I think there will only be some correction, (also an opportunity to buy in), but that with the really big tech we may well see new highs over time. 😊 But who knows if there will be a downturn, a recession which I would expect, so I'm looking forward to buying. 😃
I only have $AAPL+0.5% and $GOOGL-2.0% in my portfolio so far and I intend to hold these stocks for a long time. However, I would appreciate some downside in the other stocks so I can buy in.
Agreed!😊 Well, I guess the only one who can post it below now is the Fed
Microsoft, Amazon, Tesla, Google... I think all of them will make investors happy in the long run, but right now I think there's a downturn on the order of the day.
Agreed, I was already expecting a drop before the boom a bit and honestly, I'm expecting a recession too but it probably won't happen now no 😂 ... I still hold enough cash and I'm looking for a drop to invest. As I believe in growth in these stocks in the long run but a discount would be welcome. 😊
Ironically, I somehow didn't manage to buy into these stocks. I only hold Apple, and I'll probably hold that for many years to come... but the others I would definitely like to buy when the drop comes :)
I was also hoping to get more in there, but that's the main thing, we're not losing any. 😊 I agree, this Apple is loaded and of course it will have different fluctuations, but in another 10 years it will still be there and definitely at a higher value.
It would be nice if Apple grew some serious competition, because they are starting to become a bit of a monopoly :)
I would avoid most of them, maybe with a little correction I would consider google and amzn
Consent from the position of purchase. I'm not buying any of it anymore, but I'm holding as I write and I even believe in some upward movement in some of them, because I think those companies will still be performing here in many years. That's why I just mean I wouldn't sell everything if someone is holding the low prices from last year. Definitely some correction in the coming months once the Fed raises rates.
Selling is hard no. For some of these companies I probably wouldn't worry so much about the price over 5-10 years, but it's good to know that even great companies like MSFT have not delivered profits to shareholders for 10 years with sustained earnings growth.