The quality of Microsoft and Apple muddy the bubble thesis.

Great post as usual EVBigMacMeal. I have much the same overall conclusion and sentiment as you have expressed. I wrote specifically about the very high margins (S&P500) on the Index Investing board recently, and essentially concluded that they are likely to remain higher than 20th C because of the political/technological structures rooted in place now, and not going away, that differ to the period when the large caps forms with largely resources and industrial manufacturing.

It is not specifically the individual dominant tech firms now that produce these high margins (thinking from the frame of selecting individual stocks) but the capacity for winner-takes all effects (which can spread from one firm to another, but collectively comprising a large portion of the S&P500) with wide moat and low cost characteristics of software infrastructure.

https://www.shrewdm.com/MB?pid=734282476

- Manlobbi

Berkshire Hathaway FAQ

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