⚠️CHART OF THE WEEK: Is this the mother of all bubbles?
Magnificent 7 stocks have gained ~2900% over the last 10 years.
Alpine Macro made an outstanding analysis of the past market manias.
As you can see, Magnificent 7 stocks have skyrocketed ~30 times or ~2900% over the last 10 years. This is more than twice than any other past market bubbles.
10-year share price increase by each company: Amazon +1,027%, Apple +1,294%, Google +586%, Meta +1,011%, Microsoft +1,254%, NVIDIA +38,130%, Tesla +3,993%.
Interestingly, the term ‘Magnificent 7’ was used for the first time in early 2023 by Bank of America analyst Michael Hartnett when commenting on these seven companies in his research. In other words, likely nobody has invested ONLY in these stocks together 10 years ago because such a term did not exist.
To put their gains into perspective, in the 1990s, the Nasdaq 100 had rallied 12 times in 10 years before the Dot-Com Bubble popped.
The Nikkei 225 had gained 10 times in USD terms during the Japanese bubble of the 1980s.
Gold had seen a 15x advance in price in the 1970s before its peak.
Lastly, Nifty Fifty stock prices had fivefold in the 1960s before the bull market concluded in 1969.
Is the Magnificent 7 a bubble? Probably yes.
Is this the mother of all bubbles? It is difficult to tell with assurance but we will certainly know within a few years because such things are always known in hindsight.
Lastly, we have to remember that bubbles do not burst overnight.
Some previous analysis can be found below:
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