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Everyone keeps saying "just buy VOO, VT and chill." Fine. But Goldman's own 10-year number (best case) is like 6.5% a year, with a downside case near 3%. And this is the house view, not some doomer on YouTube. The same goes for Blackrock Vanguard and the rest of the Big names.
Trailing p/e sits in high 20s and the top 10 names are aprx. 39% of the index. So Indexing alone quietly smells... "buy AI capex and hope."
At 4% - 6.5% index performance, my retirement date moves right by years. At 10% it doesn't.
And one thing nobody says out loud: GOOGL, MSFT, AAPL, AMZN, META are basically utilities, or Value stocks; with better margins now. Apple did over 1000x since 1980.
I remember Google IPOing at 23Bn market cap, now sits at $4.2trn. that's a 15,200%.
But every $4T company doing another 5x means a $20-25T market cap. Can it be justified?
So the asymmetric money has to be somewhere. Which companies are doomed to 50x+ in the coming years.
But the pattern I'm looking for in companies, is Reach and Impact.
I mean Android is on 3bn devices. Google Search touches 5bn people. Roughly 1.5bn iphones are out there for a total for Apple's devices of 2.6bn. Meta's family of apps reached 3.6 bn of daily active users.
It's the reason these became todays behemoths.
I keep reading posts on reddit, FB, Youtube, X and other media about Space, Robotics or physical AI, Quantum maybe the next big thing and Energy (like nuclear and other forms). So I agree that the future maybe in the Rocket Labs, the Oklos, The Astss, the IONQs of the world (to name a few) and the likes. High growth and promising.
So which of the newcomers actually touches billions of people or billions of dollars of infrastructure, versus which is just a cool ticker? That may fade when the ride turns
Druckenmiller said once, you don’t get rich by diversifying into 50 mediocre assets. You get rich by finding 2 or 3 asymmetric home runs.”
1. Give me the two or three names (or more) you'd put 2% of the portfolio in, and forget about for three to eight years. And just give me the mechanism, the big Why, not the vibe.
2. Where am I wrong on the Mag 7 ceiling? which one can easily justify a 5X or more?
p.s. I currently don't hold any of the above names yet. But I hold a small cash bag ready to drop on the shortlist I build.