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dleb

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24/02/24

21:38

Post #: 72579664
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Originally posted by 1ronnie ↑

The Magnificent 7 are now up ~1,700% since 2015 compared to the S&P 500's ~140% gain.

Even the Nasdaq Composite Index, the largest tech index in the world, is up just ~230% since 2015.

Meanwhile, the S&P 500 equal-weight index is up ~90% since 2015.

We now have a market that needs the Magnificent 7 stocks to push higher.

The Magnificent 7 stocks *are* the stock market.

https://x.com/KobeissiLetter/status/1761024905485627693?s=20

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There's no denying that these mega tech stocks have secure exceptional global market power.

It has been sustainable, they have delivered and fairly consistent at that.

Despite that, there is a price to everything. Just like recruiting a prolific software engineer, you'd be prepared to pay him/her handsomely but if it is 4x the level of the average engineer, would you be prepared to do so (continue hiring him/her)?

This lofty Mag 7 outperformance has several implications :

1. They will cause the US major indices to grow beyond our expectations, provided that their growth remains sustainable and their outstretched valuation can continue unabated, but recognising this divergence that not all US stocks will do well nor that the outperformance will be equally shared across global markets
2. The overstretched valuation makes them an increasing threat and risk to everything else, because most asset classes could become collateral damage from any eventual sell-off/collapse
3. It could easily blindside us into feeling bullish to buy stocks that far from enjoying anywhere the strong fundamentals that these Mag7 stocks have. We already saw people speculating into downgraded ASX tech stocks that bore some semblance of AI.

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The Glass is not half empty ,it,s not over yet don't be so pessimistic we are on the way up ! imo , in 2000 during the tech bubble the PE was 175 on the Nasdaq , if you compare today it's only 32
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Its Over, page-20404

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