The five biggest tech stocks — Amazon, Apple, Facebook, Google, and Microsoft — are great businesses. They’ve been so successful over the last decade that they comprise about 20% of the total S&P 500 market capitalization — a level of concentration not seen since the late 1990s. They also command higher prices (valuation) than the market as a whole.
Listen to Kevin describe a simple thought experiment illustrating why it’s mathematically impossible for past to be prologue for these tech darlings. Eventually, the music will run out. Investors will again learn the lesson that price matters … just as they learned the same at the end of the Tech Bubble. Continue reading