The voting machine

Up to the 26^th of April, ALL of the performance year-to-date of the S&P 500 was explained by 8 stocks of the index: Facebook, Amazon, Apple, Netflix, Google, Microsoft, Nvidia and Tesla. The remaining 492 stocks contributed -0.44%. 2 conclusions: 1/ This is not a broad-based rally and 2/ Despite higher interest rates, it is the so-called long duration stocks in technology that have driven the stock market so far this year. It reminds us of a quote by Benjamin Graham: “In the short run, markets are a voting machine, in the long run they are a weighing machine.”. We therefore continue to favour companies with undervalued earning power and are patient till Mr Market uncovers their fundamental value.