Subject: Re: Strategy - covered calls in retirement
<I think that for the next decade Apple can maintain their moat, and keep earnings per share rising in double digits, and keep a premium multiple!
I just don't think we will see extremes of any of those things : )>
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I wouldn't say that for the high tech in general. Generative AI, VR/AR, self-driving, electric cars/trucks/airplanes, all have the potential to create huge new markets or upset old ones.

You're probably right, no doubt we're about to see some shuffling in the list of "winners" at various sizes, in both business results and market caps.

My comment was purely about Apple, both moat durability and the problems of high starting valuations.

But I suppose much of the price forecasting method could be applied to the others, individually or (especially) as a group, even if their moats continue to hold water.
Average railing earnings yield for Apple equates to a P/E of 33.
Weighted average trailing earnings yield for the other six biggies equates to a P/E of 51.5.
Simple average trailing earnings yield for the other six equates to a P/E of 56.6.
So the others in aggregate have the same problem, only more so.

These are all very big firms...the biggest.
Taken as a group, they're practically a whole statistical universe.
My thought is that it will take some very high growth rates to grow into those valuations any time soon...and that's without any disruption hitting them.

I think the businesses will do fine overall, but the stock returns from here mostly look unrewarding to me without some implausibly optimistic assumptions.
And the big seven account for 27.5% of SPY, so if the broad market is a rocket ship in the next 5-10 years I wouldn't count on these being the fuel powering it.

Number 8, the next biggest firm, is of course Berkshire. We're number 7 by revenue and also by profit.
Long may she sail.
I guess that consistency in the three rankings is a demonstration that Berkshire is pretty typical of the economy in terms of things like net margins and valuation.

Jim