What's a fancy investment conference without a little Mag Seven joke?
“The risk is simple: These stocks are not doing well,” Mark Lasry, founder and CEO of Avenue Capital Group, said Monday at the Milken Institute Global Conference. told Finance.
Lasry asked about the risk of overcrowding with technology names like Nvidia (NVDA), Microsoft (MSFT), Apple (AAPL), Amazon (AMZN), Google (GOOG, GOOGL), Meta (META), and Tesla. (TSLA) — aka The Magnificent Seven.
“What happens is that when people are nervous, they invest in things that they know well and believe will continue to exist,” Lasry added. “But we don't know what's going to happen next year. On the credit side, we know there are all these opportunities.”
Lasry, a former co-owner of the Milwaukee Bucks, has been investing in the credit markets for more than 40 years and has a reported net worth of $1.9 billion.
Suffice it to say, Lasry has seen several investment cycles and market frenzy.
And Mag Seven could be considered a fad.
Overall, MagSeven accounted for about 37% of the S&P 500 index's 10.2% gain in the first quarter, according to S&P Global Index data. In 2023, this cohort accounted for about two-thirds of the S&P 500's rise.
The group's optimism reflects its enthusiasm for profits on everything from Nvidia AI chips to Microsoft's Copilot productivity tool.
However, the rise in the stock price has slowed as investors have begun to scrutinize Mag7 more closely amid rising interest rates.
“I'm not in the business of picking stocks, but very few people come in every day and try to buy stocks with a P/E ratio of 45 or 50,” said Mark Rowan, CEO of Apollo Global Management. No, that's not our job.'' (Disclosure: Apollo Global Management is the parent company of Yahoo Finance.)
“I'm looking at broader trends. We used to have 8,000 public companies; now we have 4,000 public companies,” he added. “People think that most of the activity takes place in the public markets. 80% of companies with revenues over 100 million and 80% of jobs are in private companies.”
Some top traders shared their thoughts on how to trade Mag 7 stocks on a new episode of the podcast “Opening Bid.” You can easily tune from below.
Brian Sozzi I'm the executive editor of Yahoo Finance. He is also the host of “.starting bid” Podcast. Follow Sozzi on Twitter/X @BrianSozzi And even more linkedin. Have a tip about a deal, merger, activist situation, or more? Email brian.sozzi@yahoofinance.com. Are you a CEO and would you like to appear on Yahoo Finance Live? Email Brian Sozzi.
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