Why YOU maybe should overthink your asset-strategy on stock market - Part #2

Following my last post I would like to share a chart with you. The correlation between S&P 500 and the growing balance sheets of the big three central banks (G3):

 

S&P / FANG / G3

• Green line shows S&P 500 FANG Stocks 
• Blue line central banks' balance sheets 
• Red line development of all other Stocks, listed in S&P 500

The red line super  interesting, this one reflects the development of all other Stocks listed in S&P 500. What do you think how long such a trend can last? 

New Times, new Trends

Over the last 10 years, so many trends in the sharing economy have developed. There is a massive and sometimes existential problem for many industries. Take AirBnB for hotel industry or car sharing companies for the automotive industry and much more. Of course, the consumer also enjoys many benefits of the sharing economy. I also increasingly take advantage of it. I have an apartment that I rent via AirBnB and next year I'm going to think about to buy a camper, which I will share by camper sharing. 

Those trends are in my opinion not completely destructive. They have advantages and disadvantages and we have to deal with them. Like always, when things are changing.

Back to action

We saw in the dotcom bubble that corporate giants are not untouchable. This applies to Microsoft as well as Facebook & Co. today. Prior to the dot-com bubble, Cisco hit an enterprise value of just under $ 600 billion. Today, it´s under $ 200 billion. And that despite good profits.  

For Intel it does not look much different. It took Microsoft 14 years to surpass the 2000 level. Have you ever heard of America Online? So I hardly, they have completely disappeared from the scene.

In an increasingly fast-paced world, time is a scarce commodity, and spontaneously I can not think of a scenario that could shatter a company like Amazon in long term. Consumption will always exist in human life - and Amazon will make it easy and fast. But there are certainly objections which I just do not think about. But if we take Facebook, Google and Microsoft, it looks a bit different. Microsoft has got once a thick blue eye in the ring.

Facebook could be pushed out of the market tomorrow by another (perhaps blockchain-based) social media application. Also increasingly frequent data protection debates could eventually break Facebook´s and Google's neck. These are all just theories and the probability that they will occur in short term is vey low. However, even these companies would not survive a stock market slump unscathed. 

I´m not a financial advisor nor will I give any advices. If you´re interested and INVESTED, inform yourself about the current situation.