First, you won’t get a disagreement from me on Apple about the stock split. That was ridiculous but not as bad as Tesla’s. Second, I’ll just throw some stats out about Amazon (since I know them well) and some of the others you mentioned:
WFC - 2020 Revenue $58B, growth -30%, P/S @ 3
KO - 2020 Revenue $33B, growth -11%, P/S @ 7
XOM - 2020 Revenue $180B, growth -30%, P/S @ 1.5
NKE - 2020 Revenue $37B, growth -5%, P/S @ 6
AMZN - 2020 Revenue $386B, growth -+37%, P/S @ 4
Amazon’s 2020 revenue was greater than all 4 combined and it’s cheaper than two and more expensive than two going down in revenue 30% while it went up 37%. I don’t know Apple and Microsoft as well but Amazon has a heck of an argument to be worth more than the other four combined. There’s no question which one I’d want to own in 5 years.
I forgot to add Pfizer but it’s about the same as the others in terms of price except that unlike the others, it grew in 2020. Only 2% but still not down.
I think my point (well really Burry's point) may be getting misinterpreted a bit here, though it was admittedly probably poorly written.
To be clear, I didn't say Microsft was
worth more than those 5 companies combined. I said Microsoft's market cap has
grown more in the last 2 years than the total market cap of those 5 companies combined. Not comparing total value to total value or growth to growth. Comparing growth to total value, which is insane.
That is to say, the
total combined value of Exxon, Coke, Wells, Nike, and Pfizer is $1 trillion. That is their total combined value as companies.
In the last 2 years alone Microsoft's market cap has INCREASED by roughly $1 trillion.
So what we are pricing in here is that MSFT's growth in a mere 2 years is worth the same as 5 of the world's largest companies
total value combined.
We see modest headlines for these megacaps that move the market cap of the company by more than the total value of other gigantic companies in a matter of days. MSFT's market cap added the value of the entire company of Coca Cola in 4 days a few months ago on rumors that they would buy a company they didn't end up buying (Tik Tok).
We're just in this weird market where these ultra slow moving mega caps move like small cap growth stocks. When AAPL bounces back to the $140s in a couple of weeks from recent lows it will quietly have grown by the entire market cap of Netflix in a couple week period, for the 2nd time in the last few months..
We're just dealing with such insanely large numbers here that people have grown accustomed to just shrugging off a $500bn increase in a company's value in a few weeks on really very little change to the company itself. I think this is what Burry is talking about.
Amazon has grown more than all the other mega caps and its stock price has run a lot less so maybe you could argue that they are the exception.
2 years ago AAPL was a $600bn dollar company. Now AAPL's market cap moves by $600bn in a few months and people barely flinch.
That did not work out so well so far
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