According to Buffett's golden partner Charlie Munger, this is the world of the "Big Seven" in technology, and we all live in it.
At the age of 99, Munger is the Vice Chairman of Berkshire Hathaway, an investment group led by Warren Buffett. For nearly 50 years, Munger has been Buffett's right-hand man, helping the company grow into one of the world's largest companies.
In two recent interviews, Munger said that in recent years, a few technology companies (mainly technology companies) have become so dominant that their performance has greatly surpassed the overall market, to the extent that investors who do not hold stocks in these companies may be left behind.
He said, "I believe that in order for modern investors to succeed, they almost have to buy a few stocks that are far above average. They try to own companies like Apple and Google just to keep up with the trend
Munger is an old-fashioned value investor who usually avoids expensive growth stocks and values predictability. He usually insists on investing in companies he knows well, such as Costco, so hearing Munger's support for tech giants is a bit uncomfortable. On the other hand, Apple has been one of Berkshire's biggest bets in recent years.
Between 2016 and 2018, Berkshire invested over $30 billion in this iPhone manufacturer, and since then, Apple's stock price has more than doubled. Berkshire currently holds nearly 6% of Apple's shares, valued at approximately $157 billion, which means that the consumer electronics giant accounts for almost half of its entire stock portfolio value.
Apple's stock price has also surged by about 40% this year, dwarfing the 14% increase in the S&P 500 index.
Munger said that when it comes to acquiring large technology companies, Buffett and he believe that "Apple is a logical candidate", partly because Apple's stock price was very cheap at the time.
As for Buffett, he explained his bet with Apple's strong brand, emphasizing how indispensable Apple devices are to customers, praising CEO Tim Cook as an outstanding leader, and stating that Apple's business is better than any company under Berkshire.
Munger continued, "I like these high-tech companies. I think capitalism should expect a few big winners by chance
Munger seems to believe that the stock market has become a "winner take all" arena, where a few large companies crush their competitors and earn huge profits. He seems to believe that their dominant position is not wrong.
Whether unwilling or unwilling, Munger has accepted today's world giants and believes that avoiding them is not a viable option. His message to the diehard seems to be: either keep up with the times or fall behind.