Wednesday, December 2, 2015

Only Nine Stocks Matter......ANOTHER PESKY FACT!

Only Nine Stocks Matter

Fang stocks — Facebook, Amazon, Netflix and Google,  while the Nifty Nine, which adds Priceline, Ebay, Starbucks, Microsoft and Salesforce.

If made into indices, either of these groupings would have gained about 60 per cent for this year, while the rest of the 
S&P 500 is up about 1 per cent. (Note that Apple appears on neither list.) 

All these companies are richly valued the Nifty Nine's collective price/earnings ratio at 45, double that of the S&P 500. They also look expensive when compared with their sales.

Hype and excitement around a few big companies, and eclipse for riskier small companies, are classic symptoms of the top of a bull market.

While the S&P languishes unchanged in 2015, these small groups of overwhelmingly propagandized stocks are up on average over 60%, but with a collective P/E of 45, they are not cheap.


No comments:

Post a Comment