Petri Redelinghuys of Herenya Capital Advisors on the ‘Magnificent 7’ and trading philosophy.
The so-called ‘Magnificent 7’, or ‘mag7’ for short, are 7 of the world’s largest companies in tech, known for their immense value and growth. These companies, in no particular order, are: Tesla (TSLA), Microsoft (MSFT), Nvidia (NVDA), Apple (AAPL), Alphabet (GOOGL), Meta Platforms (META), and Amazon (AMZN). While some of them struggle individually, as a whole they’re trading at all-time highs, which could tempt one to get in on the action.
The Trend
Looking at the Mag 7, it’s undeniable that they’ve done very well in the last decade or two, which has made their shares very expensive. Currently, they seem to grow at an unprecedented rate, making it highly lucrative if you got in early. However, we don’t believe that the current rate of growth is sustainable, and we believe it’s better to invest your money elsewhere if you don’t already own shares.
Our Style
Each trader has their own unique style, and we prefer to stick to the straight and narrow, and invest in undervalued stocks that often fly under the radar when a shiny new trend takes the spotlight. We have also taken a defensive posture for the time being, as the market looks very overextended. This coincides with the breadth having shrunk significantly, with all the movement being concentrated in a very small number of companies, making it more appealing to protect the money rather than following the herd. While the Mag 7 and the like can easily grow another 20-30%, we believe there are far more reliable options, such as the software sector and Chinese tech, such as KWEB.
The magic happens in our community!
We’re posting on TradingView, we’re posting on our blog… but the real magic happens in our client community where you can get access to our ideas as they develop. So, open your account and join us and start taking advantage of South Africa’s Top Broker for both Active Traders and Traditional Investors. We have a Discord server, with a Daily Morning Call at 08:30 (Monday – Friday), where our Trading Strategist shares market updates and posts information with the Community. If you are not trading with us yet, what’s stopping you?
*Please note that these trade ideas form part of a larger weekly plan and the value of financial products can increase as well as decrease over time, depending on the value of the underlying securities and market conditions. The risk of loss arising from trading in Contracts for Difference can be substantial. You should carefully consider whether such investments are suitable for you in the light of your circumstances and financial resources.
