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  • Originally posted by Perry Ict View Post
    The disparity between the top market cap stocks and the rest of the stock market might resolve the other way too.; in other words, the breadth of the stock market could improve with the other stocks catching up. I'd imagine that not every lagging company (in terms of stock price) is a bad one. But my guess is that the real economy would have to improve to see that on a large scale.
    Correct, and in the meantime a number of businesses will just go bankrupt. But the ones that were doing well before (and therefore were valued highly) are the ones thriving now and will pick up market share. If the economy improves, while the smaller companies might rebound, the larger ones might have left them in the dust.

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    • Originally posted by EntrepreneurMD View Post

      Did you just make an argument against indexing, or at least the wrong indexing SP vs. Nasdaq 100?

      You gonna join me in blasphemy you know. No, not blasphemy. Most put their faith in John C., I put my faith in JC for guidance.
      If anyone looks over the posts I've made, it's quite clear I'm not a fan of indexing blindly. I don't want to own a cruise line or a mattress company or Blackberry. I want to own companies in their hypergrowth phase.

      But also it points to the folly of dismissing "tech" as an entire sector and calling it overvalued. 20 years ago "tech" was any company that added ".com" to their name. Paycom enables payroll services, Shopify enables online sales, MongoDB is a database service, Twilio is for communications. Facebook, Amazon, Netflix, Google, Microsoft, Adobe. They're all considered "tech" but they serve very different purposes. At a fundamental level, the only similarity is that they all provide their services via the internet. Given that the internet is ubiquitous, I think it's time to abandon the term "tech" for companies like that just like we no longer call companies with electricity or phone lines "tech" companies.

      Same goes for product based companies. Nvidia designs and sells graphics processing units, Apple makes phones and tablets and other electronic devices, Tesla makes cars. Just having a microprocessor doesn't make these companies more similar.

      People like to talk about tech as a fad, probably because of the dot com bubble (where there was no growth in the businesses, only growth in the awareness of the business -- no actual sales). Yes, some companies went along for the ride up like Amazon and Microsoft which then had to crash back down, hurting those who invested at the peak of mania. But unless you think we are due for a return to dial up internet, the Yellow Pages, and the rotary phone, there's no reason for so-called tech companies to experience some kind of collective downturn.

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      • Tech companies of old need to keep reinventing themselves or perish -- ask Kodak.

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        • While hypergrowth is awesome when it works -- Tesla. Tech landscape is also littered with one off ponies and bright stars imploding-- AOL, Palm, Nokia, Blackberry.

          Hence caution on wildcatting on hypergrowth companies. Wouldn't use retirement funds for this. Speculation funds -- sure, have at it.

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          • IBM and Xerox (XRX) were both blue chip “tech” market giants and dominate employers. Chart them against S&P 500 at the max period and they behave differently. Market leaders evolve on their own.

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            • Originally posted by EntrepreneurMD View Post
              I put my faith in JC for guidance.
              JC from NSYNC?

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              • Originally posted by StarTrekDoc View Post
                While hypergrowth is awesome when it works -- Tesla. Tech landscape is also littered with one off ponies and bright stars imploding-- AOL, Palm, Nokia, Blackberry.

                Hence caution on wildcatting on hypergrowth companies. Wouldn't use retirement funds for this. Speculation funds -- sure, have at it.
                The good thing is that business metrics are all public. All those companies didn't just drop off a cliff, you had a few quarters to get out as the growth stalled or stopped. Very rarely does a company completely drop off a cliff. Yes, there is volatility but if you simply waited for growth to drop from 50% to 30% you might lose 20% of that stock's value but the vast majority of companies growing at 50% will have appreciated much more than that. Holding on to companies hoping for a turnaround is what leads to the big losses, but at that point they are no longer growth stocks.

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                • Originally posted by StarTrekDoc View Post
                  Tech companies of old need to keep reinventing themselves or perish -- ask Kodak.
                  Worse still, Kodak R&D made tremendous developments in digital photography. Kodak was afraid to bring it to market it due to fears of cannibalising the market for film.

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                  • Originally posted by CordMcNally View Post

                    JC from NSYNC?
                    JC you're slow. Ha! You know whose the only one who knows the future. So when you all say nobody can predict the future, I laugh.

                    JC NSYNC. Julius Caesar. Johnny Carson. John Carpenter. Jean Claude. Jedi Council. Any of these guys can probably outperform John C. indexing.

                    John C. can outperform JC - Penney, I'll give you that.

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                    • Originally posted by Tim View Post
                      IBM and Xerox (XRX) were both blue chip “tech” market giants and dominate employers. Chart them against S&P 500 at the max period and they behave differently. Market leaders evolve on their own.
                      So you call them "tech" even though their core tech is 50 years old. My point is, how are they at all comparable to Nvidia or Shopify, also tech?

                      IBM and Xerox are also anything but growth stocks. Another reason I stay away from even indexing based on the market cap, I don't want to invest in them either. I'd rather own a fast growing company like LGI Homes (LGIH), which is anything but tech.

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                      • Originally posted by Hank View Post

                        Worse still, Kodak R&D made tremendous developments in digital photography. Kodak was afraid to bring it to market it due to fears of cannibalising the market for film.
                        This is why newer companies considered tech are such good investments. The big companies are afraid of cannabilizing their own products or disrupting existing customers, so they hold back new development, leaving them prone to disruption.

                        See Zoom vs Webex/Teams, MongoDB vs Oracle, Zscaler vs Palo Alto Networks, Crowdstrike vs Symantec. Focused companies can achieve the most overall growth while adapting to the modern environment without requiring support for legacy systems.

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                        • "Stanford is making significant cuts within its athletic department, dropping 11 of the 36 varsity sports it offers. "
                          In the world of academics and student athletics, Stanford is by far the premier University. A student does not get a pass on academic standards or athletic standards. 25 straight Directors Cups in a row and the 3rd largest endowment. Covid-19 has defeated one of the largest deep pocket institutions.
                          https://sports.yahoo.com/stanford-el...sbvKvmIWK2jQ--
                          https://en.wikipedia.org/wiki/NACDA_...CAA_Division_I
                          https://www.usnews.com/education/bes...est-endowments

                          Pretty low. I would hate to see the cuts coming in the other Universities.


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                          • Originally posted by Tim View Post
                            "Stanford is making significant cuts within its athletic department, dropping 11 of the 36 varsity sports it offers. "
                            In the world of academics and student athletics, Stanford is by far the premier University. A student does not get a pass on academic standards or athletic standards. 25 straight Directors Cups in a row and the 3rd largest endowment. Covid-19 has defeated one of the largest deep pocket institutions.
                            https://sports.yahoo.com/stanford-el...sbvKvmIWK2jQ--
                            https://en.wikipedia.org/wiki/NACDA_...CAA_Division_I
                            https://www.usnews.com/education/bes...est-endowments

                            Pretty low. I would hate to see the cuts coming in the other Universities.

                            I don't see what the surprise is. For most universities, men's football and basketball are the money makers and most other sports lose money.

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                            • Originally posted by mgchan View Post
                              So you call them "tech" even though their core tech is 50 years old. My point is, how are they at all comparable to Nvidia or Shopify, also tech?
                              I don't think most people would argue that those (Nvidia and Shopify) are bad or obsolete companies. The question is, at what price? You can get burned buying great tech companies that are also too expensive.

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                              • mgchan I get what you're saying; but betting on the right horse is -- well --- betting. Using whatever metrics you want, there's a fair amount of uncertainty in growth companies and that's why it's called Venture Capital/seed money for many of these tech. Out of the 2000 tech, what has survived? Palm? AOL? Pets.com? myspace? HD-DVD consortium?

                                The streets are littered with good company strategies and teams but just didn't run the gauntlet or win the popularity contest. It's easy to point to the winners like Amazon, Netflix, Google and darlings like Zoom. Back in Feb, I was thinking my post-IPO purchase of zoom was such a dog that I almost dumped it; then COVID happened and suddenly I'm a genius? Nah, got lucky after my laziness and vacation forgot to sell it in reality.

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