Large Cap Growth Stocks (FB, AMZN, AAPL, GOOGL, MSFT, TSLA)
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- čas přidán 28. 06. 2024
- Some of the world’s largest companies have dominated stock market returns in recent history. For the five years ending July 2020, an equal-weighted portfolio of Facebook, Apple, Amazon, Alphabet, Microsoft, and Tesla more than quadrupled in value, leaving a total market index fund investor in the dust. Who knew beating the market could be so easy?
Referenced in this video:
Do Global Stocks Outperform US Treasury Bills? papers.ssrn.com/sol3/papers.c...
Identifying Expectation Errors in Value/Glamour Strategies: A Fundamental Analysis Approach papers.ssrn.com/sol3/papers.c...
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One of the greatest mysteries of the world is how in the world you have so few subscribers compared to the incredible quality videos you post. It's a mid-cap value channel with small P/E compared to its fundamentals, and I definitely recommend "buying" many "shares" of it. @Ben Keep doing what you do ;)
this comment is genius
We're waiting for the channel's IPO 😅
The 1.3%/98.7% argument where 1.3% of global stocks deliver all of the excess returns to US T-bills is one of the best arguments ever for investing in index funds. No one can reliably identify the needle in the haystack ahead of time so the only way to capture the needle is by investing in the haystack.
"Don't look for the needle in the haystack. Just buy the haystack."-Jack Bogle, The Little Book of Common Sense Investing
Its a good read.
You don't need those 1.3% though to beat the SP500
Indeed. Some people THINK they can identify those massive gains in some stocks. But they can't.Only a few handful of people have done it over decades.
The beard is awesome! This guy is great. No nonsense, no stupid magic tricks or special effects. Straight information based on statistics and history. Thank Ben!
Its high level. Very nice ! Really appriciate it :-) 👍🥇
andrei ?
No one on CZcams even comes close to the quality of Ben's investing advice 👍
@@bad_writer The Plain Bagel is a close second.
As soon as he said “In their paper” I knew he was gonna say Fama and French 😂
Hahahaha
@@alankoslowski9473 6:43.. what are you talking about?
@@zzzzzzzzzzz6
Sorry, my bad. I only remembered the earlier reference which was someone else. Sorry.
Alan Koslowski no worries man... I was just like “am I going crazy” 😂
Exactly Lol
Ben Felix is BACK
You can catch him every week on rational reminder :)
Timothy Slevin-Vegdahl what is that?
@@PierceJordan czcams.com/users/RATIONALREMINDER
Back with a beard! 😬
When Ben stays away too long, I get nervous. I need the Ben reality pill.
This is the absolute best name I have heard for his guidance. It really is the reality pill.
I almost bought individual stocks. Good thing this video came out ;)
He said in the podcast his wife had a baby not so long ago, I'm sure that'll keep him busier.
LRoyz Climbing I bought and regret now even 10 years later. Waiting to sell.
Johny cringe
"Stick with index funds." Got it!
You're back! We missed you!
Crypto currency is the future.
How much is good for a start and how do I start trading with him ?
Yea thanks to Rockwell and he's group, I met him on the stock marketing aspect that's binary/forex trade not bitcoin...so with he's results then I strongly believe he will be ok in bitcoin trading too
Thanks for the insight, I remember friends calling me crazy when I started investing in bitcoin now I shut them up with my 4 figures weekly returns
I heard Expert rockwell strategies are really working fine .
I started watching this channel around 3 months ago when I JUST started learning about how the stock market works and I honestly had a bit of a hard time fully grasping everything you were saying in some videos. Now, with a little more familiarity under my belt, I've come to see how valuable your videos are! Awesome video and thanks Ben.
This video is pure gold! Amazing how you are able to deliver such complex topics in an easy understandable manner🙌
I can't watch all your videos without letting you know how resourceful they have been to my own understanding of these issues. Thank you Mr. Felix.
One of the good things about Felix's CZcams channel is that it is 100 % high quality.
Not a video each Day.
Not a video each week.
But a super high quality video when there is something to talk about.
You actually have a chance of following This channel and not be spammed with too many videos where you dont have the time to watch Them.
You can Keep Up.
And the videos are Worth watching because its not daily or weekly spam to get views. Like many of the normal youtubers do.
Thank you so much Ben.
The wallstreetsbets logo had me laughing. I was not expecting that on your channel.
It also aged really well
Tesla calls got it!
Easy money.
@@BenFelixCSI Literally can't go tits up
@@BenFelixCSI can I have some money?
@@jakefarmer3122 the dude is giving gold advice on how to make money. Stop begging, get smart and get rich😎
How is this not one of the most popular investing videos on CZcams? It contradicts 99% of the other content, but backs it with legitimate data!
You are an absolute gem. You make by far the best educational videos I've watched on CZcams. Keep up the excellent work man!
Ben Felix - you have the most informative CZcams channel on investing. As most sites only focus on returns within the past 10 years, I love how you include historical data beyond what you average investor looks at or has easy access to.
Thank you for this! Months ago, when I was starting out, I bought a lot of the Russell 1000 Growth (VONG) because I was only looking at returns, and only over the past 10 years. Watching your videos has shown me that I need total market ETFs so I started buying those. I was already thinking of selling the growth ETF but this video here fully convinced me! Thanks so much for everything you do!
Haha I did the same, exact same funds too!!
@@puneetjamariya I really thought I had figured out the magic purchase that everyone else was too stupid to see lol!
Spot on lol! I was like 'yeah I got this, just forget about it now'
thx for the vid ben. this is incredibly timely, i recently rejiggered my portfolio to be 10% each MSFT, AMZN, FB, AAPL, NVDA, AMD. I kept 30% Voo (sp 500) and 10% GLD, which unlike you I think Gold is a great hedge). The past few years I rode FB, NFLX, and Amazon way up. Then I put most into VOO, before this recent realign. I just felt like kicking myself for missing out on stocks like AMD for too long. TSLA is the one I stay away from, I just feel it's too much of a bubble.
My one counterpoint would be, l I read an article about how Swedens govt was huge into FAANG companies stock. An entire govt. And you know they reaped MASSIVE rewards. Basically I feel like a lot of people are doing like Sweden. At some point the fundamentals dont matter, what matters is what the crowds do. And I feel like the crowds, emboldened by how easy investing is in the last few years (with super easy online stock accounts), flock to the flashy, big name companies like AAPL. So, I feel like the big tech company trend may continue?
In summary, I'm not sure what I'll do with the information in your video, I am not sure I will change my portfolio because of it, but it's certainly great information to have.
Incredible content as always. Your videos have been a colossal inspiration for me - even though I live in an emerging country.
I think you have already heard of him, but Paul Merriman advocates for index investing, more specifically in Value Large/Small US+Developed+Emerging companies - his podcast and website are also full of insightful historical data on why it’s probably a bad idea to go against indexes in the long run. Thanks again, Ben!
I’m glad you covered this because that’s exactly what I’m trying to tell some people. I’m rebalancing my portfolio to reduce weight on large cap as unfortunately QQQ IS market cap weighted and therefore skewed heavily on mega cap stocks.
Hi Ben, nice to see you back :). Very timely topic as well and great quality as always.
Good to have this ~rational reminder~ coming back to index funds, rather than betting on (irrelevant) sexy stock picking.
I learn something every time I watch a Felix video. Thanks Ben!
Welcome Back! Another great analytical video. Love your evidence-based contents. Thanks Ben 🙂👍
Fully explained and understood. Most of the big companies nowadays are here for a longtime. Based on the innovators behind them. It’s not about being that big thing again, it’s about making improvements and keeping up with the fast growth of the world.
I've been waiting for a new video for so long, and it came out today on my birthday!
I'm so happy :D
Rumour is times are getting tough at PWL. Cut backs have been made on mics and razors...
(Great video by the way)
I have a great mic. It’s my home office that’s the problem. I need some acoustic panels.
Thanks for the timely perspective, great as always. Good refresher as it reinforces well documented facts that are hard to articulate in relatively simple terms.
Great video. Really helps me deal with the FOMO from not investing in these big companies!
I really appreciate these videos you are making. Mostly unopinionated thoughts backed by research, yet delivered in very approachable format.
They’re often opinionated, but I do try to back the opinions up. The reality is that in financial economics the only fact that we can agree on is observed outcomes. The explanation for the observed outcomes is a matter of opinion, even if the opinions stems from a great theory.
Glad to see you back!!!
Your beard makes your arguments even more compelling. Thanks for the great insight. My only concern is that because these companies make such a big part of the total market, once they go down, my total maket index fund will also go down big time.
Lol
Has been a while! Nice seeing you again!
Just the dose of reality check I needed. Although I live in India and predominantly invest in the Indian equities mark, the common sense and statistically validated approach you have outlined, appears universally applicable
High quality content, per usual. Thanks Ben!
Glad to see a new video!!!!! Keep em coming!!!
Congrats in 180k subs, Ben.
I own a Tesla stock... but it's within my total US market index fund :)
Your videos are very well prepared in terms of content and are currently more relevant than ever.
Thank you!
Greetings from Germany!
Been looking forward to this since the small and value cap stocks video.
Your videos are a gem! Thanks Ben for keeping us all rational about our investment choices. Could you do a video sometime about different weighting strategies for equities. Such as Market Cap Weighted, GDP Weighted, Reverse Cap Weighted, and Equal Weighted?
Usually your videos cover quite advanced topics and are hard to understand but you did a splendid work explaining this one. Definitely best 12 minutes of my morning.
Ben, amazing video as always! With every upload of yours, I find myself asking an eternal question: Can you legally use the Daily Planet sound effect in your intro?
High quality explanation, tnks for the outstanding work. Greatings from Brazil!
Great straight forward, while still very much in depth explanation as always Ben. I was wondering about this subject very recently, and while I would never consider trading in my VOO, ONEQ, and VTWO for FB, APPL, AMNZ, NFLX, and GOOG, I wondered if investing in the top 5 companies of the US economy would be enough diversity to match or outperform the market. I suspected not, it just didn't intuitively feel right, but I couldn't explain to myself exactly why. Great timing on this video, literally was wondering about this yesterday, and lo and behold, your video came up on my main feed. There truly must be some sort of collective consciousness or something. Again, wonderful video. Keep 'em coming. Cheers!
Just buy QQQ instead of the individual equities
It's great that you explained the lower expected returns of growth stocks compared to value stocks using also the behaviorist approach.
Btw. when will your next video about gold come out? I believe you have been planning it for a while now.
Looking forward to it, and as always great work.
Thank you, your videos are a great resource for many layman like me. Its nice to realize i was already building my portfolio similarly as someone who heard briefly what factor investing (sorry if im misusing terms). I plan to look more into the research along with your videos as a guide thanks for the much needed help!
Thank you and welcome back !
Thanks for the videos Ben. Do you sample portfolio?
Own all of these as of right now. Really looking forward to seeing where these stocks are a year from now!
What I’ve noticed is that people have SOMO (sadness of missing out) and they want to invest on the next big thing, but they keep investing in the last big thing. The next big thing is probably sitting in the bucket of small cap value stocks right now.
its Apple.
Glad you’re back! Loved the video, do you think that mega cap stocks of the past can reliably be compared to the current mega caps though? Companies like GM and atnt were massively innovative initially and achieved scale but weren’t really able to repeat or maintain this growth in the coming years leading to relatively stale growth. The same can’t really be said about companies like Apple though that continue to push out new products to their entire target population from computers into iPod to phones, iPads, watches and now entering into the subscription market too. Each of the above products are also replaced every few years by the consumer too. So imho current mega caps seem very different in that they continue to innovate/ scale, and hence studies that don’t take this factor into account seem invalid?
What objective measure can differentiate between an innovative and scaling company and a non-innovative, non-scaling company? That's a necessary criterion to study it. Large cap and growth have objective definitions, so their performance can be studied.
Hi Ben, thank you for taking the time to create a video on this topic! I loved it! I actually listened to your podcast (the one about this topic) because of the relatively long time between the last two videos this year but it's just not the same. I much more appreciate the time-compact structured information provided in your videos!
Still, I wonder if you can answer a question that has been going in my mind on this topic. Value Stocks are evaluated mostly by comparing the price to book value. I wonder if the valuation method though is still an adequate fit for todays information age. As I write this question now, Google is generating user data on me. The asset value of Google should go up in valuation. There is HUGE competitive edge provided by this today, especially for the companies listed here. So, I wonder if the current market prices that may SEEM high compared to classical valuation would still be high if one would account for the digital assets in the companies book values. I'd love to hear your thoughts on this!
Best, Daniel
A good reminder that I needed, thanks for the sounds advice Ben!
Eugene Fama and Kenneth French should claim royalty from Ben, none of his videos are complete without referring to their papers!
Another excellent video!
Thanks for the high quality as usual video. I just have one point I want to make appreciate your thoughts. One of the million dollar question is that how long the great company will remain great, one of the factors I would give heavy weight is the original ownership, I don’t know if you have seen any research paper on the original ownership especially on those greatest American company in history, for whatever the reason, when the company run with original owner, somehow they seems to have the magic power. The few examples of past great companies you mentioned GE, ATT, Ford, they all start to be not that great after the original owner is long gone. Hopefully you have some good thoughts on this aspect
When are the updated model portfolios coming out, Ben? Thanks for all of your amazing content.
Excellent video, thanks Ben.
Could you please make a video on trader's algorithms ? I know they replaced human "buy/sell" actions, analyze stock market constantly and widely, but I am sure you have many things to teach us.
Solid chirp putting in the Wall St. bets logo. Very subtle but I caught it!
And he is back!
Always like before watching because you already know Ben is going to drop a bomb of knowledge
Thanks again for another great video. The recent performance of the big growth stocks have been remarkable, which easily grabs attention. This video puts this growth into perspective and to help look at the situation rationally. I'm planning on buying ITOT soon
Excellent and timely video, Ben!
Does the current dominance of the FAANG stocks lead to risks for market weighted, total market index funds? I've seen arguments online that the market weighting of an index fund would potentially concentrate the fund too much into just a few stocks (and by extension, concentrate too much into the technology sector), at the expense of other stocks. Is this enough of a risk to be concerned about, or is this just internet fear-mongering?
I bought a few shares of Amazon back in March when the market tanked and needless to say, it has made some nice profits, but this video touched on something that's been bugging me.
I made large gains due to the unexpected event of the pandemic, and rebound in the market, but that sort of large increase in share price theoretically won't happen again, unless there's another major market tank in the future. So I'm expecting the gains from the 2 shares I have to be relatively mundane going forward.
For that reason, I've been considering selling the shares and using the money to purchase shares of a small-cap value etf which should be more profitable, theoretically.
Much needed motivational video to hold index funds in this volatile market.
Your "index funds" in many cases are heavily exposed to Tech (including Canadian based ones, which are ~8-10% SHOP), so not sure how this motivates you in any way.
@@utubethumbsup true but I think the point is that they're more reliable and safer than focusing simply on large cap growth
@Austin Duke this is the way
Also know as "Buy and hope"
Would like to see a video about bank stocks. Their prices and multipliers seem to be super attractive right now. Keep up the awesome work!
Hello, I wanted ask you what you were thinking about the timing model on the ivy portfolio of meb faber?
Hey ben what books do you recommend for building a portfolio and stocks in general
Awesome video! as usual !!
Thanks a lot Ben for the insights and analysis!!
Yes Ben we needed to hear from you after these uncertain times!
Hi Ben, great video and apt for what is happening in the market right now. If Large Cap growth is expected to trail the market, is it a poor choice to go for market weighted index funds as their biggest components are large cap growth?
This aged well
Wow man your videos are unbelievably insightful.
GREAT VIDEO (10/10). What's your size threshold for large, mid and small cap stocks? Thank you Felix!
Nice video, always with strong facts that sustain your vision about the subject.
Super underappreciated channel! Excellent analysis!
All of Ben's content summarised in one sentence: Just buy index funds guys.
Very persuasive arguments for index investing. I’ve been a benefactors of owning Apple, amazon, Microsoft and google over the better part of the last ten years or more and I have profited greatly, I guess I was lucky, but my rationale was simply the these companies would change the world in a way and magnitude that is not expected. The price of a stock is largely set by the expectations of professionals investors. Professional investors have a systematic vulnerability in that they are very myopic, only caring about the next quarter, and hence future returns more than a year out are heavily discounted in the current stock price. It has always been my strategy to ask what companies are going to be a big deal in 5-10years down the road. I sold most of my Apple about 5 years ago because they were the biggest company on the US exchanges and one would predict below market returns from that point forward, but I would have been better not selling.
Yup, Apple is a beast. Haven't sold it since 2010 and won't be selling it any time soon. What's not counted for is how much cash some of these tech stocks have so if they stop "growing" they can push out more dividends, do stock splits, buy back shares, basically buy enough time until they start growing again.
Great to see another video and be reassured that our current strategy is still the right strategy.
How sensible is it to value tech stocks, which mainly work with intangible assets, using the price-to-book ratio? And what sense does it make to compare this with the past, where there were mainly companies with tangible assets?
So compare the P/E ratio instead. You would get to the same conclusion.
Value stocks have lagged growth for 20 years. @Ben Felix is great but on this note, I disagree with him. Every time IS different.
@Brian Birnbaum this is awkward.
Since inception 2000-07 to 2020-08
US Small caps: IWN (value) beats IWO (growth) by 1.43% annualized
US Mid caps: IJJ (value) beats IJK (growth) by 1.29% annualized
US Core: IUSV (value) beats IUSG (growth) by 0.87% annualized
www.avantisinvestors.com/content/avantis/en/insights/can-growth-stocks-get-growthier.html
also
papers.ssrn.com/sol3/papers.cfm?abstract_id=3697452
@Bryan Bradford Yeah, I guess my view is that it's obvious that FANG will peak, at different points of course. So making this video is either totally arbitrary, or it's calling for a top. Given what's said, especially toward the end of the video, it's clearly the latter.
And I'm glad you acknowledge growth's dominance. His statistics are correct, but most stocks are total dogs, which include a lot of bad 'growth' stocks. The BEST stocks have been growth stocks, though there may be fewer of them. That's what I was trying to acknowledge, but there wasn't room for nuance beyond the links. That was the whole story in his eyes.
Welcome Back!!
At the time being, no one knew that. It's as easy as that. The future will remain forever uncertain and it's easy to says "I knew it" in retrospect.
Welcome back Ben!
I'm curious, does investing in an index of small-cap stocks have the same returns as historical returns for small cap stocks? Since they eventually move out of the index, won't I necessarily miss out on the "better" parts of a company's run? Should I be stock-picking small value stocks?
It is not possible to predict what is going to happen. But it is very interesting to try! Thanks for the insights!
I know you are a big proponent of all in one index etfs, so I would love to hear your thought on Vanguard’s newest addition for retirees, VRIF, which is a monthly payout, all in one etf with equal weight bonds to stocks? Is this similar to the i shares XTR?
Very informative content! What do you think about equal weighted index funds? Personally I don't like them. 🙂
Ben, great video and glad to see you're back. By this logic, would you suggest we also add a emerging market ETF to our portfolio? If so, roughly what weight proportion? Thanks
Emerging markets should be part of every diversified portfolio. I would start with market cap weights.
Love the video! Could you do a video on "epicentre stocks"? (Such as airlines, cruiselines, hotels etc)
As always really informative video, and I really dig the new bearded look. 😉
Boom! Mic drop. Ben your video are the best. Top!
I’m a newbie to investing and it gave me a warm fuzzy feeling when his summary at the end reflected exactly what I’m doing with my strategy!👍🏻
Most newbies fail simply because they don't understand how the market works in general or in particular how the market relates to stock or currency pair they entering. If a retail trades doesn't grasp what the market makers are doing and when they are doing it, the greatest strategy in the world will fall. For new traders the markets are like entering an F1 race before you've passed your drivers license test. I am a beginner I never believe I made $30,000 in just a week from trading and with the market. an expert financial analysis and he made me-learn to read and understand the language of price action. He guides me with the exact time frame to trade and now I just received my first withdrawals of $30k in my bank account today I'm very happy, my advice is for you to contact him he will guide you perfectly well, and thank me later, I guess this is a good way to show my heartfelt appreciation for literally breaking the chain of my financial debit when I needed it most, you can contact him on his email
(elvishercules48@gmail.com)
You are an amazing wealth of knowledge. Please keep up the amazing work Mr. Felix!
Hey Ben. Thank you for these videos, I wih I had found you one year ago when I started investing.
How would you balance an index fund based portfolio between total global market and small cap? 90/10? 75/25? I know its up to my own risk profile to decide for this but do you have a rule of thumb?
I'm currently DCA'ing in a MSCI world index large cap and would like to compliment that with ishare World Small Cap in my DCA strategy. How would you balance the two?
I invested heavily in single stocks but have recently sold some of them as I realized after watching your videos I had picked them rather randomly and the ones that did well did so out of luck, and the ones that did bad likewise - in other words: I had no idea what I was doing.
I also own some Tesla and Apple but even after watching your videoes its difficult to let go of them. . .
This was confusing. I just read wallstreet bets and put in tsla calls
It is very straightforward: 1. These large stocks have the best return when they were undervalued. For example, Telsa before 2020. It is too late to invest in them now. 2. What the history tells us is that large cap growth tech stocks like TSLA will no doubt crash within a few years.
If you don't understand what he says, you don't understand the most basic concepts in finance and should not be investing in high risk stocks.
@@kyrie4451 Ok so TSLA calls it is.
If the thesis is correct, then the rational non-gambly,much-investment play would be to exclude FAANG from one's portfolio. After all you expect them to trail the market over the next several years. Why would one buy an index fund which is composed of 10% or 15% or more of these super cap stocks?
Because betting against these super cap stocks would also be a gamble?
You could; however, buy an equal weight S&P. So you keep Apple, but at .2% instead of ~6% of your portfolio.
@@LaidbackLuc9 Nasdaq100 made almost 2x the sp500 average over the last 10 years so its kinda contradicts what hes saying unless it change
@@sylvainh2o historical returns are not equal to future performance.
@@Fabian9006 hmm not buying a stock is not betting against. 10 largest stock = -1.51% the market. Buying everything but those stock would logically beat the market.
Is it possible to see a (multiple) ETF sample portfolio covering these concepts? I already have my portfolio but it would be cool to have a theoretical confrontation.
I only have 2 of them. How many do you have?