In the stock market, it’s become Apple, Microsoft and Alphabet vs everyone else

POINTS
  • Does a relative shortage of stocks combined with somewhat mechanical sources of buying explain the Dow rising to 29,000?
  • What’s truly scarce are big, reliable cash flows that investors believe will endure economic wobbles and constant technological disruption.
  • This has created a vastly bifurcated market, and an unusually wide spread between the valuation of the most expensive stocks and the cheapest ones.
  • In aggregate Apple-Microsoft-Alphabet trades at 26-times this year’s profits, with no debt and enormous capacity to invest, buy back stock or fund future dividends. The broad market is below 19-times earnings.

www.cnbc.com/2020/01/18/in-the-stock-market-its-become-apple-microsoft-and-alphabet-vs-everyone-else.html