If That Was A Bubble, What’s This?

Independent Investment Manager and Publisher • Jul 22, 2020 at 3:00 PM EDT

Just three stocks, Apple, Amazon, and Microsoft, make up more than 16% of the S&P 500 Index and over a third of the Nasdaq 100 Index. Together they are now valued at nearly $5 trillion.

Just three stocks, Apple (AAPL), Amazon (AMZN), and Microsoft (MSFT), make up more than 16% of the S&P 500 Index and over a third of the Nasdaq 100 Index. Together they are now valued at nearly $5 trillion. That’s larger than the entire economy of Germany and roughly the size of the Japanese economy. What is really most astounding, though, is the aggregate valuation of these three behemoths relative to their free cash flow. Only at the peak of the Dotcom Mania have we see anything like it – which begs the question: ‘If that was a bubble, what’s this?’

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