Stock-market crash signal with 30-year record of doom flashing for big tech - Business Insider

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A Wall Street expert says a trend that with a 30-year track record of wrecking expensive stocks is flashing for big tech — and warns investors to brace for a turnaround within months

Stocks that grow to command more than a 4% weight of the S&P 500 have rarely gone on to maintain that status for more than a year since 1990, according to The Leuthold Group.

At first blush, the dominance of these tech companies is not new, particularly to the myriad investors who have reaped their returns. A record 80% ofsay buying US tech stocks is the most crowded trade, according to a recent Bank of America survey — and they are still buying anyway, from the looks of things.

As Segner tells it on a recent company podcast, the club has a narrow entrance and a wide exit: it's extremely difficult for any company to grow that big and enter, but companies typically do not hang in there for very long. Only Microsoft, GE, Cisco, Exxon, Apple, and Amazon have managed to break into the elite club since 1990.

All told, this unprecedented market concentration is bending the norms in a manner that Segner considers unsustainable. That said, he maintains that the risks to these stocks remain palpable. In addition to a reversion to average valuations, big-tech companies risk the wrath of antitrust enforcement, such as the Justice Department's reported plans to file a. New tax laws that crack down on offshore profits and slower demand for cloud computing also pose risks.

 

귀하의 의견에 감사드립니다. 귀하의 의견은 검토 후 게시됩니다.

Rule no. 1. In Investing. Ignore the advice of so called 'experts'.

Please more 'why's it so expensive' videos and less 'stock market might drop at some point in the next year, might not, if we really knew we wouldn't be writing for BI' articles

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