Down goes the Dow

seattle prattle wrote:

agip wrote:

small caps are a double from the March 2020 lows. holy smokes. what a run.

exactly.

Tech did the first wave of outpaced performance, then they went on pause while small caps and to a lesser extent emerging markets played catch up. Easy to see why. Really, sector rotation has a way of evening out over the long terms. But i still bet on Tech, to be the dominant theme over long term like a decade.

what to do with tech is one of my biggest questions.

it sucked 2000-2010 but roared 2010-2020.

So...now what?

A few people I know own nothing but tech stocks and have made ungodly amounts of money.

10 years:

Tech +20% per year!!!!!!

Value: +11% per year.

Imagine your portfolio doubling every 4 years or so.

But is tech a metronome? Will it swing out of favor? Or was the 2000-2010 flatline an overreaction from the tech bubble, that won't be repeated?

One of the things I'm most curious about.

I'm overweight tech but not massively. Just seems to me tech companies are getting the smartest people and therefore will do the best.

seattle prattle wrote:

my portfolio has doubled over the last two years.

Can you make the same claim?

Who should be giving who advice?

Scratch that. Sorry if i don't listen to this ill advised advice.

Fixed that.

Actually your portfolio would be doubling almost every 3.5 years. Even if you don't own tech stocks outright you do with the more popular mutual Funds.

Here is Vanguard's VTI and the largest holdings:

Name Symbol % Assets

Apple Inc AAPL 5.03%

Microsoft Corp MSFT 4.44%

Amazon.com Inc AMZN 3.70%

Facebook Inc A FB 1.83%

Alphabet Inc A GOOGL 1.45%

Alphabet Inc Class C GOOG 1.37%

Berkshire Hathaway Inc Class B BRK.B 1.17%

Tesla Inc TSLA 1.16%

Johnson & Johnson JNJ 1.04%

JPMorgan Chase & Co JPM 0.99%

my best guess is that tech is the new dominant force going forward and the only question is to what extent they will be regulated and re-vamped by the legislature and the EU. In the early years they were given free reign and it sure seemed like the understanding was that i order to maximize development and deployment, govt. wasn't going to meddle. But the tone has really changed, They created - or helped to create - a monster. Now their is no shortage of posturing and rhetoric about curtailing monopoly powers, anti-competitive practices, etc. And the second question, do they really mean it, or are they going to just lump fines on them that don't fundamentally change their structure? Until we see a major re-vamping, my bet is that they are the best game in town and will remain so.

So that is about 17% of a Total Stock Market index fund, Big, but not nearly as big as when investors, like myself, buy the Growth funds that proliferate in their companies retirement 401 accounts. Growth funds might easily double that percentage, and there are a lot of them.

The Unkle wrote:

Irony Mann wrote:

Oh, the irony!

How do you keep coming up with such original material?

The same way you keep screwing up the simple quote function.

I could see a pullback or cool down if any of these lawsuits are successful. When Microsoft lost it's case in 2000 it triggered a big quake in tech stocks that helped the dot com bust, but really I think what you'll see is companies like Google and Facebook becoming *gasp* boomer value stocks or something like that, like AT&T.

As long as rates are low though, it's hard to see how the party can't keep going. Inflation is the only threat and that hasn't managed to be a thing since the 80s.

there are always exogenous threats...inflation is just one.

war, political unrest, recession, currency problems, etc.

low rates would stay low even as the world crumbled.

seattle prattle wrote:

my portfolio has doubled every year for the last two.

Can you make the same claim?

Who should be giving who advice?

Scratch that. Sorry if i don't listen to this ill advised advice.

?

Ghost of Igloi wrote:

seattle prattle wrote:

my portfolio has doubled every year for the last two.

Can you make the same claim?

Who should be giving who advice?

Scratch that. Sorry if i don't listen to this ill advised advice.

?

That’s a strong NO.

agip wrote:

Racket wrote:

I could see a pullback or cool down if any of these lawsuits are successful. When Microsoft lost it's case in 2000 it triggered a big quake in tech stocks that helped the dot com bust, but really I think what you'll see is companies like Google and Facebook becoming *gasp* boomer value stocks or something like that, like AT&T.

As long as rates are low though, it's hard to see how the party can't keep going. Inflation is the only threat and that hasn't managed to be a thing since the 80s.

there are always exogenous threats...inflation is just one.

war, political unrest, recession, currency problems, etc.

low rates would stay low even as the world crumbled.

Finally get to use my proper handle again. Stupid policy by LetsRun

Anyways, we spent the last 4 years with quite a bit of political unrest. Didn't seem to really slow things down much. I think if anything we've seen just how few threats there really are and how heavy a certain overnight borrowing rate from a certain reserve bank really weighs on the market

Dr. Racket wrote:

agip wrote:

there are always exogenous threats...inflation is just one.

war, political unrest, recession, currency problems, etc.

low rates would stay low even as the world crumbled.

Finally get to use my proper handle again. Stupid policy by LetsRun

Anyways, we spent the last 4 years with quite a bit of political unrest. Didn't seem to really slow things down much. I think if anything we've seen just how few threats there really are and how heavy a certain overnight borrowing rate from a certain reserve bank really weighs on the market

I certainly agree that the vast new wealth of the world + technology + a much better educated population + no wars = a very resilient world economy.

But sh/t happens, always has, always will.

agip wrote:

Dr. Racket wrote:

Finally get to use my proper handle again. Stupid policy by LetsRun

Anyways, we spent the last 4 years with quite a bit of political unrest. Didn't seem to really slow things down much. I think if anything we've seen just how few threats there really are and how heavy a certain overnight borrowing rate from a certain reserve bank really weighs on the market

I certainly agree that the vast new wealth of the world + technology + a much better educated population + no wars = a very resilient world economy.

But sh/t happens, always has, always will.

yes, but the question becomes, not if the market is headed lower, but if tech relative to the market is headed lower. Different question. And particularly interesting how one of those massive unexpected events happened this year, yet Tech finds a way to still outperform.

seattle prattle wrote:

agip wrote:

I certainly agree that the vast new wealth of the world + technology + a much better educated population + no wars = a very resilient world economy.

But sh/t happens, always has, always will.

yes, but the question becomes, not if the market is headed lower, but if tech relative to the market is headed lower. Different question. And particularly interesting how one of those massive unexpected events happened this year, yet Tech finds a way to still outperform.

well this event was great for tech...couldn't have been more supportive. Tech's ability to connect people from all over/work from home/buy without a bricks/mortar store benefitted from this crisis.

The next crisis could be different, and go against tech's strengths.

Plus the government regulation problem is rearing its head again...although that never seems to make too much difference, does it? Would a divestiture of Instagram really wreck Facebook as a company? Nah.

One of youse argued that Trump couldn't do much with federal land - something about how the exec branch didn't lease out federal land. I can't remember which of you it was.

Here's the WH doing what it can to exploit the land.

WASHINGTON — The Trump administration is rushing to approve a final wave of large-scale mining and energy projects on federal lands, encouraged by investors who want to try to ensure the projects move ahead even after President-elect Joseph R. Biden Jr. takes office.

In Arizona, the Forest Service is preparing to sign off on the transfer of federal forest land — considered sacred by a neighboring Native American tribe — to allow construction of one of the nation’s largest copper mines.

In Utah, the Interior Department may grant final approval as soon as next week to a team of energy speculators targeting a remote spot inside an iconic national wilderness area — where new energy leasing is currently banned — so they can start drilling into what they believe is a huge underground supply of helium.

In northern Nevada, the department is close to granting final approval to construct a sprawling open-pit lithium mine on federal land that sits above a prehistoric volcano site.

https://www.nytimes.com/2020/12/19/us/politics/in-last-rush-trump-grants-mining-and-energy-firms-access-to-public-lands.html?action=click&module=Top%20Stories&pgtype=Homepage

Facts point to investors willing to over pay for technology more than any supposed miracle narrative.

https://www.wsj.com/market-data/stocks/peyields

Ghost of Igloi wrote:

Facts point to investors willing to over pay for technology more than any supposed miracle narrative.

https://www.wsj.com/market-data/stocks/peyields

That shows the S&P with a higher valuation than the NASDAQ.