The Magnificent Seven Stocks & Their Pending Crash
History might not repeat but it sure rhymes which seems to be the case here. I remember back in 2000, right before the Dot Com crash when four stocks, affectionately known as the “Four Horsemen” ruled technology. They generated so many gains with quarter after quarter of earnings growth. It seemed to go on forever until it didn’t anymore.
I’m talking about MSFT, INTC, CSCO, and Dell.. Today we’re repeating this same lunacy except it’s the Magnificent Seven that rule technology in nearly the same way. Their strong price action is pushing the S&P500 to new all-time highs, which I’m a BIG fan of, but I can’t help but wonder one damn thing.
S&P500 All Time High January 2024
If MSFT, AMZN, META, AAPL, GOOG, NVDA, and TSLA are the reason for new highs in the S&P500, then what are the other 493 stocks doing? Are they chopped liver or what?
Good question. I don’t know the answer but it’s making me nervous. I get it, technology is always a winner in the long run but I can’t help but wonder if there’s a repeat Dot Com crash on the horizon. These seven stocks can’t keep the S&P500 riding high forever. Eventually their earnings growth will stall and momentum traders will exit fast.
From the October 2022 low most have skyrocketed (I’m looking with disappointment at your TSLA).
Magnificent Seven Stocks Relative Performance since October 2022
From 2000, AAPL, NVDA, and AMZN rocked it.
Magnificent Seven Stocks Relative Performance since 2000
That said, if you’ve been a long term holder of a few of these Magnificent Seven stocks, you’d be doing damn well. Hell, if you’re trend trader of NVDA you’d be making some sick coin. Still I always come back to what the other 493 stocks are doing because that’s the real economy.