In before the Swordmaker spin
“This is total FUD”!
Swordmaker had to work overtime on this one. Bless him. There were a bunch of articles about the same thing from various sources. I liked this one linked on Wnatfinger.com...
Apple’s Decline is Dragging Down the Whole Stock Market
https://www.spartareport.com/2018/11/apples-decline-is-dragging-down-the-whole-stock-market/
“Apple makes up about 4% of the S&P 500, which is weighted by market value, and roughly 5% of the price-weighted Dow Jones Industrial Average. It accounted for nearly 13% of the S&P 500’s total return for the year through September, according to S&P Dow Jones Indices, trailing only Amazon. “
Swordmaker is welcome to correct me, but P/E ratios (which for decades have been the most important indicator of whether a stock is overpriced) on all of these stocks have been multiple times beyond traditional acceptable values. This may have been reasonable when Google, Apple, Amazon and others were in their growth stage, but these companies have become massive and are all fully mature or nearly so. How much bigger are any of them likely to get? At this point why should they be priced like they are still in the high growth stage of their development. In other words most of them have peaked and pain is more likely than happiness to be in investors’ futures regardless of interest rates, national debt, and punishing tariffs.
Recently, Jeff Bezos took some heat when he said that Amazon would eventually falter and go bankrupt. He was trying to point out that all companies have a life cycle. That life cycle is likely to be shorter for modern tech companies than it was for railroads, airlines, car manufacturers, retailers and even tech companies of old.
So how long will Amazon, Google. Microsoft and Apple reign supreme? Obviously with the huge fortunes that they have amassed it will be a while before they shrink into mediocrity, but there is much evidence that all are close to if not beyond their peaks.