Stock Investments In An Antitrust Era

Doran’s book went on to describe the resistance of the time. “At least initially, the federal government was wary of challenging Standard Oil. Sherman pushed hard to change the fact. Ever so slowly, through his impassioned speeches, and through the scrupulous investigations of congressional committees, his assault coalesced in a sweeping piece of legislation.” Today’s resistance is similar, and today’s congressional hearings are led by Representative Dennis Cicilline from Rhode Island. He totally gets the spirit of the Sherman Act, as do many Republicans like Senator Josh Hawley, and so does Lina Khan.

Why does this matter to investors like us? The U.S. stock market is “all twisted up” in today’s “vast combinations” (FAANG stocks) like Queen Latifah and Eugene Levy’s characters were in the movie, Bringing Down the House. Here is a chart of the S&P 500 Index over the last five years:

To succeed in the S&P 500 Index going forward, it must have leadership from the stocks which have been the most popular over the last five years. Any look back at history will tell you that popularity in extremes has led to underperformance.

Which takes us to the next question. What could cause these monopoly businesses like Amazon, Apple, Facebook, and Google to give up their leadership position in price appreciation? Amazon dominates in e-commerce because they don’t have to make money as they enter a new market. They “cut-to-kill” like Standard Oil did and can do so because their profits from the AWS division provide all the earnings needed by a hungry army of faithful Wall Street analysts.

Apple tracks us everywhere we go and then acts like a virgin at the college dance as they criticize Facebook and Google for robbing our privacy. Facebook and Google gave away social media and search to use the “customer” to become the product. Watch the documentary The Social Dilemma to understand this better. The frogs in the boiling water (all of us) are part of a society which exists to create wealth for a narrow group of people who act as the arbiters of what is socially acceptable. God help us if we let Mark Zuckerberg, Jeff Bezos, Tim Cook, and the Sundar Pichai determine right and wrong in the United States of America.

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Disclosure: This article contains information and opinions based on data obtained from reliable sources, which is current as of the publication date, and does not constitute a recommendation ...

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