Monday's Musings: What's Up With Big Tech Stocks? The Insider View For 2019
Big Tech Still Remains Attractive, Especially With The Recent Valuation Downgrade
Markets are still cautious. Global outlook looks very different than the US outlook. Actual economy and Wall Street remain disconnected. Meanwhile, markets are trying to figure out a rational explanation of which one is the leading vs lagging indicator.
Algo’s have been reset so we’re operating on different rules and they will be reset again. Why Big Tech? They play in a winner takes all market. Apple and Google provide 99% of all the consumer software in the US. Facebook, Google, and Amazon drive almost 63% of all advertising dollars
Tech is still strong with 20 to 40% growth. Investors will find it hard to find other asset allocation classes this good and this dominant.
With valuations down, we can see the shift back to big tech in Q1 2019, especially now with depressed valuations. Everyone’s waiting the Q4 holiday numbers before making the plunge. So FAANG plus MIcrosoft, Adobe, Salesforce, ServiceNow, and Tesla are still all hot and Baidu, Alibaba and Tencent drive the China market.
As for the race to 1T in valuation, We’ll see a resurgence in 2019 of one of the FAANG’s plus Microsoft vie for the title. So here’s the run down: