Apple stock – (AAPL) stock
All eyes are on Nasdaq.
During the two years ended in December, the Nasdaq The non-financial 100 index rose more than 103%, almost four times the gain of the New York Stock Exchange composite index.
If Moses (the tech giants) cannot lead the market to the Promised Land, will there be a Joshua to take his place? This is the question of the hour.
I hope the new leaders will be solid value stocks, including many industrials and financials.
History shows that market leaders don’t have to be big tech companies. Energy companies led the parade in 2007, with a 34% return. In 2012, financial stocks led the way, up nearly 29%. In 2013, consumer discretionary stocks gained 43%. ……
So there is no law that says technology stocks should be in the driver’s seat. And even…
Tech stocks have been the leaders in three of the past four years. Over the past 14 years, according to a chart from Novel Investor, technology stocks have averaged 15.2% return, the best among Standard & Poor’s 11 sectors.
It’s only twice in the past 14 years that the tech sector has declined. On both occasions – 2008 and 2018, the overall market was also declining, as measured by the Standard & Poor’s 500 Index.
My conclusion is that tech stocks don’t need to lead for the market to do well, but they need to at least perform decently.
Predictions may be crazy, but here are mine for the Nasdaq in the next 12 months. The major (mainly technological) actions of the Nasdaq 100 will achieve a yield of about 7%. The largest Nasdaq The composite will be up 11%. And the US stock market, as measured by the Standard & Poor’s 500 Index, will also be up 11%.
America’s Car-Mart specializes in selling used cars to customers with weak credit, primarily in the South. Almost all of its customers take out a car loan. The company is astute at valuing both cars and loans; he has made a profit in each of the past 18 years.
LGI Homes, more than any other home builder I know of, specializes in lower cost starter homes. I think millennials, when they start having kids, will want single family homes, but most of them would be forced to buy the more expensive ones.
StoneX Group’s specialty is clearing commodity and currency transactions. I expect the commodities sector to heat up as inflation rises over the next two to three years. Foreign exchange transactions may also increase if the Biden the administration is more favorable to trade than its predecessor.
Among the most important and popular actions on Nasdaq, i still love Apple and Alphabet Inc. (GOOGL). I consider Microsoft overpriced at 35 times the earnings. It is the same Amazon.com (AMZN) to a multiple of 73 and Facebook to 26.
As for You’re here, which trades at 1,108 times earnings, I’d rather be short (bet against) than own it.
This is the 15th column I’ve written which includes my favorite stock picks on Nasdaq. My 12-month average gain on the first 14 columns was 21.2%. This compares to 19.3% for the Nasdaq Composite index over the same periods, and 14.1% for the Standard & Poor’s 500 index.
Last year started with the market totally in the tank due to the Covid-19 pandemic and triggering closures. From this low base, the S&P climbed 68% and the Nasdaq Compound 93%. My picks, up 111%, beat both.
My top pick last year was LGI Homes, up 230%. My worst, Exchange Bank of Santa Rose, went up 39%. Between the two, Johnson Outdoors Inc. (JOUT) reported 187%, Investors Title Co. (ITIC) 57% and Kimball International Inc. (K(BA) L) 45%.
Keep in mind that the recommendations in my column are hypothetical – they do not reflect actual transactions, transaction costs, or taxes. These results should not be confused with the performance of the portfolios I manage for clients. In addition, past performance does not predict future results.
John Dorfman is president of Dorfman Value Investments LLC in Boston and a syndicated columnist. He can be contacted at [email protected]
John Dorfman is president of Dorfman Value Investments LLC in Newton Upper Falls, Massachusetts, and a syndicated columnist. His company or clients may own or trade securities mentioned in this column. He can be contacted by email.
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