Technology Monopolies Keep Growing and Winning

Some people are expecting some kind of crash for the big technology stocks. The run in the big technology companies has given Jeff Bezos a net worth over $200 billion.

When you get historically wealthy like Rockefeller or Carnegie then this wealth is usually only lost when the next generation cannot handle it or if governments take it.

Amazon and Facebook are global. The US hearings on the monopoly power looked like there would be no action. If there was a splitting of the companies like the ATT split. The pieces of ATT became more valuable after the split. Jeff Bezos would not control all parts of an Amazon Retail, Amazon Cloud and Amazon Fulfillment but he would continue to own most of them.

Walmart kept growing after it made Sam Walton the richest man in the world. His three main living heirs have a combined $170 billion.

There was no coming back for most mom and pop stores or Sears or KMart.

The rise of Amazon has put Walmart in a trailing position. The Walmart heirs have probably taken dividends and invested in the big technology companies.

Apple is dominant as well. When did people stop expecting the previous cellphone leader Nokia to rise to the competition? At its peak, Nokia was worth over $300 billion. Now it is $28 billion. Apple is worth $2.16 trillion.

The major US technology giants are worth over 50% of all US stocks.

This makes many people argue there is a bubble and they are overpriced. Valuation is not cheap but they still have 20+% growth each year. They also have more information about what people are buying and will be buying. They also are using the money to build more and more technology advantages.

Falling from the top is not easy or simple. Especially if they are at the top because they have the best technology, monopoly advantages and the best people. It was easier to displace the top company if it was an oil company.

People complain about how the top 1% of individuals keep winning. The big technology companies are at the very top of the business and financial food chain.

People and companies very rarely get into the top ten globally via luck. If there was luck involved then they have spent the last ten years solidifying their advantages. Riding along the rise of the technology super-elite has been among the best investment strategies for the last 20 years.

The best investment returns came from the FAANG (Facebook, Apple, Amazon, Netflix, and Google). It was not the SP500.

It seems safe to assume the winners will keep winning.