I’m Going All-In On Big Tech

QUALTRIM.COM & PATREON (Includes free trial)
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SOCIAL MEDIA
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DISCLAIMER
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I am not a professional investor and have never claimed to be. I'm an amateur investor sharing my experience of what I've learned, where I have had success, and where I've had failures. I share my thoughts on investing and performance with transparency. My approach and goal to investing is to buy high-quality long-term investments in world-class businesses that I call "compounders". I view my investments as businesses, not as stocks. Before creating content on YouTube full time I worked as a senior-level programmer for 8 years. Over the years as a programmer, I compounded my knowledge of development. I take the same iterative learning approach to my study of investing. I study investing as a craft in the continual pursuit of being better. I will make mistakes in investment decisions from time to time. Results are not guaranteed. Please do not blindly follow me into any investments, and make sure your portfolio and investments are built around your specific income, risk tolerance, personality, timeline, and overall circumstances.

[bdabeast]

New to the channel. EchoesFromAbove decided to make a bashing video of you. His points were shallow and I disagreed with most of what he said as being "bad". The comments section overwhelmingly came to your defense, in stark contrast to those he usually calls out. Kudos to you for generating a strong and positive fan base, you've gained a follower. Cheers.

[mattderron]

100% agree - I would also include companies like Visa (V) and Mastercard (MA) into this thought process as well. They always look "overvalued" but are businesses with huge moats, insane margins, ridiculous cash flow, and still have revenue growth > 10%

[dgi]

@Joseph Carlson After Hours
1) It feels like your argument here is that people have been wrong in the past so people will always be wrong in the future so just buy big tech now. This doesn't seem very well thought out. It's great to look at the historical performance of these companies but where is the analysis on the future returns?

2) I agree with your quote: "The growth will slow down, it will not stop". But again, where is the quantitative analysis of future growth? Much time is spent discussing qualitative factors, which are definitely important, but so are the quantitative ones. You love AAPL, yet it is only estimated to grow revenue and eps at about 6% and 8% annually respectively. It is my opinion that this is not worth current PE of 30.

3) I agree that good companies should trade at a PE above the average company in the SP500. However, the SP500 is nearly 1 std above the average multiple for the past 20 years (slide 5 from link below). So everything seems relatively expensive, especially when considering the risk free rate is over 5% so I question if this is a good time to plow in. Similarly, MSFT is a great company with subscription revenue. But saying you believe it should trade above a 30 PE "just because", seems to lack any quantitative analysis for me to follow you there.
Finally, big tech is OVERVALUED, not undervalued at this current time. They comprise 32% of the market value of the SP500. However, they only account for 21% of the earnings. See slide 11 from this deck

META and GOOG trade at a discount to the market and seem like the only buys to me.

[same.]

Here’s another reason why big tech always holds up. They are already the top weighted stocks in S&P-500 and every 2 weeks, like clockwork, millions of Americans pump in a portion of their paycheck into large cap mutual funds via 401K contribution. So essentially, we bid up the top stocks all the time.

[danielhe]

Your channel is underrated!! Keep up the good work man. 🎉

[miomillionen]

Though I fully agree with most of your points, when looking at valuation you should not take the SP500 P/E but the SP500 P/E without „the magnificent 7“ as otherwise their higher P/E is causing the gap between theirs and the SP500 average to be significantly smaller.

[andrewweir]

This was such a great video, I’ve not seen anyone else break down the big tech value proposition this way. Awesome work. Thank you!

[bacccarani]

You should make a video where you compare big tech to stocks like Nvidia and Tesla.

[wingchiu]

Hi Joseph, may I ask which broker are you using right now (in this video)? Thanks for the recommendation.

[katewilliams]

I’m compiling and picking stocks that I’d love to hold on to for a few years before retirement, do you think these stocks would do better over the years? I’d love to retire with at least $2million savings. Now you gotta rely on a pretty good diversification if you must stay green. Currently up 21% and being cautious. Still better deal than letting it sit in savings or checking earning near 5% interest.

[ltmsimply]

Great video.. I been trading the big tech companies for a while without any fear of loosing my holdings… 🎉

[larryronhartfield]

When it comes to investment, diversification is key. That is why I have my interests set on key sectors based on performance and projected growth. They range from the EV sector, renewable energy, Tech and Health alongside coins, and gold. I'm also working on an investment plan that includes AI looking into Nvidia, MSFT, Alphabet stocks among others with my FA, Lisa Rosa Cavanagh. It's been a year and half of steady growth to a 7 figure portfolio...

[antoinemorcos]

Good point about the super investors vs the best well known stocks Joseph.

[dewaynecampbell]

Are those companies really even tech companies anymore? I feel like they are more consumer discretionary now. Amazon is an online retailer that has a portion of the business in AWS. Apple hasn’t been innovative in years. They sell phones and iPads with a subscription service for other features. Same for Netflix. No big innovations there either. Just another SAS company that falls into discretionary spending. Thoughts?

[marcb]

You forgot to mention one super investor that has nearly 100% of Apple in her portfolio for 10 years straight. It is my wife.😍

[pranavnayak]

Genuinely simple and honest financial suggestion .. kudos

[Muller_Andr]

The market has been a turmoil since covid, the brief relief rallied for only a year and now the devastating effects of pumping trillions into the economy is here and will be for a while.

[kimofrosty]

Remember super investors are also managing rich peoples money that they already probably have shares in these big tech from their perspective they'll probably be overweight, I don't want someone to put my money in AMZN in fact 30% of my portfolio is already in AMZN 20% in AAPL and 20% in MSFT.

[TheBallers]

These companies are leaps ahead of anything else in terms of RnD spend it’s an easy assumption that THEY will out innovate competition

[speedevee]

Even if big tech is priced correctly today, you can still take advantage of them being over priced in the future when the market inevitably overheats.