Technology Big Boys Bolster Equity Markets

‘Opportunity often comes disguised in the form of misfortune, or temporary defeat.’  Napoleon Hill 

Apple- $571 Billion

Amazon- $358 Billion

Facebook- $354 Billion

Google- $528 Billion

When you look at the market values of each of the companies above, what is hard to remember is that every single one of them has been in the doghouse of investors over the last 10 years.

You might not recall, but at one point, Microsoft injected a few hundred million dollars when Apple’s (AAPL) stock reached an all time low of 8 dollars per share.  After the internet bubble, Jeff Bezos’ equity in Amazon (AMZN) reached five dollars per share, and only a few years ago languished several hundred dollars below where it currently trades. The same hold true for Google, or now Alphabet, (GOOGL) and we all should remember only a year after it came public, Facebook (FB) sold for below $20 dollars a share as the legend of Mr. Zuckerberg was merely, shall we say, a hoodie.  

Markets change, companies progress, and clearly, they can become worth far more in a relatively short period of time. Some would argue the run for these specific companies is too much, too fast. In fact, if you compare their values to something so insignificant as Mr. Buffett’s beast Berkshire Hathaway (BRK-B) ($356 Billion) or General Electric (GE) ($286 Billion), one might suggest Amazon and Facebook are in orbits where gravity will have a hard time keeping them aloft.  

All four of the tech superstars carried their weight and then some when they reported earnings this week. Not much was expected from Apple, but when it sells 40-50 million units of product every quarter, no matter how down on the company Wall Street gets, it earns so much money investors still find it attractive. Plenty of pundits would argue the stellar reports from these juggernauts provide the essential support for the market in a business environment which is hit or miss at best. When second quarter GDP growth came in at a paltry 1.2%, also came the realization that the no growth environment remains difficult to shake, like a irritating cold.

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Disclosure: Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can ...

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Lucas J. 4 years ago Member's comment

Great article! Can you describe what you mean by $BRK-B and $GE being insignificant relative to those companies?

Yale Bock 4 years ago Author's comment

Hi Lucas,

The comment was tongue in cheek, sarcasm as you will. Those companies are significantly bigger in sales, cash flow, and net profits yet trail in market cap- hence the sarcasm. I hope this clarifies things and thanks for the question. Best of luck with your investments.

Yale Bock, CFA

President, Y H & C Investments

Lucas J. 4 years ago Member's comment

Oh! Makes sense now. Thanks for clearing it up. You too!

Carl Schwartz 4 years ago Member's comment

Not to worry, it was pretty clear. I enjoyed the article as well.

Yale Bock 4 years ago Author's comment

Hi Carl,

Thanks for comment and glad you enjoyed it. Good luck with your investments.

Yale Bock, CFA

President, Y H & C Investments