Crazy Thoughts: Bet It All On Tech
I am tempted to buy some tech names at the current prices. I could purchase some Microsoft, Apple, Amazon, Facebook, Google… and hold on to those for ten years or longer. They are not great dividend payers, but it’s hard to imagine these companies going anywhere. They have billions in cash. Their moats are huge.
And while they don’t pay dividends, they’ll likely be able to re-purchase their shares with their cash. Companies with $100B+ in the bank often will buy their own shares, if they can’t find a good company to buy.
Technology is the growth engine of the economy. At some point, big investors will pour trillions of dollars back into those stocks.
Microsoft!
I love Microsoft! They’re a cash-generating machine. Windows, Office, Azure… All they do is win!
Apple!
I’m not a fan of Apple in that I don’t use any of their products. But it’s another cash-generating machine.
They make more money in the phone market than any other phone maker. They’ll roll out a new type of computing device (TV, car) and capture that market one day. They certainly capture the PROFITS in phones, watches, and tablets.
Amazon!
Amazon is at a 52-week low. So I can see the bear case here. The “deliver anything to your home” model is facing some headwinds. Amazon workers are starting to unionize. People are ordering less as the “stay at home” trend reverses. The AWS cloud isn’t growing for them much anymore. Bezos is gone.
I don’t love Amazon in the same way that I love Microsoft, but I USE Amazon. As I was writing this post, my wife came into the room and said, “I just ordered this thing from Amazon…” No joke.
Vanguard Mega Cap Growth ETF (MGK)
I could buy these individual stocks, sure. But isn’t there an ETF that contains them all already? Yes, there is! Vanguard Mega Cap Growth ETF (ticker MGK) looks like a good option for this. Low 0.07% fees. I love Vanguard as a company. And their holdings look like what I am talking about.
AAPL, MSFT, AMZN, GOOGL, and FB are 6 of their top 8 holdings. You also have names like Visa and Mastercard, NVIDIA, Home Depot, Costco, Disney… OK, OK, not all tech. But they are mega caps.
When the stock market regains its senses, these names are “easily” up 20%-40% in one year. It actually could be a short-term play. Instead of earning 2.1% from a cashable GIC, I could put that same money in those five stocks (FAAMG), which would be a crazy bet. And in hindsight, I will kick myself for not doing it.
OK, I guess I’ve talked myself into it. I will put 5% of my investable cash into MGK. I’m convinced that it will be a profitable play in 12 months, more than the 2.1% that my cashable GIC is paying.
I’m going to ease into it. A little today, a little next month, and so on.
