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Times are challenging for quality investors today.
A lot of high-quality companies are on sale.
There have never as much ‘Buys’ on Our Buy-Hold-Sell List as today.
Let’s dive in right away.
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All-time highs
Even despite the war in the Middle East, the S&P 500 still trades near its all-time high.
Is this a moment to take some profits from the table?
As Warren Buffett said: “Be fearful when others are greedy and greedy when others are fearful.”
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Let’s take a deeper look.
The Magnificent Seven has done most of the heavy lifting over the past few years:
Apple (AAPL)
Microsoft (MSFT)
Alphabet (GOOGL)
Amazon (AMZN)
NVIDIA (NVDA)
Meta Platforms (META)
Tesla (TSLA)
These seven companies make up over 30% of the S&P 500.
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Excluding The Magnificent Seven, the returns of the S&P 500 over the past few years are much lower:
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The same is true for the valuation levels.
The chart below compares the Forward P/E of the index's top 10 companies against the rest.
Once the largest companies are removed, the broader market appears far more reasonably valued.
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I compared some of the world’s best investors against the S&P 500.
Red: the investor is trailing the S&P 500
Green: the investor is beating the S&P 500