8 mega cap stocks have carried markets in 2023. Here’s what comes next
Few of us would’ve predicted that by June the S&P would not only be positive, but up over 11%. On face value, a healthy market. But dig a little deeper, and it quickly becomes apparent that this performance has been carried by the big mega-cap tech stocks. Such is their performance, and the lack of performance by the rest of the index, that Apple, Microsoft, Alphabet and Nvidia now account for a third of the S&P500. This all begs the question: what next? Do these mega cap stocks sell off, does the rest of the market trade up, or will it be a bit of both? If it’s the former, which companies will take the reigns? These questions, and more, are answered by today’s guest – Jacob Mitchell, founder, CIO and lead Portfolio Manager at Antipodes Partners. Antipodes houses two global funds, an emerging markets fund, and an actively traded global shares ETF (ASX: AGX1). Before starting Antipodes, Jacob spent 14 years at Platinum Asset Management, where, as the co-CIO and lead portfolio manager of the Platinum International Fund, he oversaw $3.5 billion in assets under management. Jacob goes to town on a lot of subjects, including: his bear case for consumer-facing mega cap tech; whether the AI boom is in fact a bubble; where he’s seeing low multiples despite strong earnings growth; and the stocks that will lead the the next cycle. Note: This episode was recorded on Wednesday, June 5 2023 Timestamps 2:30 - Megacaps have dominated. What's next? 5:30 - Is AI a bubble? 9:10 - Slowing in the West, reopening in the East 12:00 - Market valuations and fundamentals don't line up 15:30 - Eyes on smaller companies bridging the gap 20:10 - Primed sectors 22:50 - Holding the line 27:20 - Liquidity is draining 30:20 - The secular winners of tomorrow 34:45 - Retail investors are sceptical of the energy transition 41:00 - Investment case for fossil fuels 44:00 - Hedging risk in today's market 48:00 - High conviction stocks