This year has seen a strong performance in U.S. technology stocks, with the six major tech stocks (Microsoft, Apple, Nvidia, Amazon, etc.) accounting for 30% of the S&P index's weight, a phenomenon never seen before in the U.S. stock market. What can we discern from this?

1. The Trend of the Times

The current era is one of technological innovation, with tech stocks at the forefront of the global industry. This is why tech stocks can stand out. Particularly, industries like artificial intelligence, semiconductors, and robotics are continuously advancing, leading the trend of the times. Each era has its own trend, and the current trend is high technology.

2. Performance-driven

The performance of these six tech stocks is excellent. Only with performance growth can stock prices continue to rise. "Performance is king" is a rule in stock markets around the world; concept speculation without performance support cannot become a super bull stock.

3. Global Development

Advertisement

These six companies are all globally developed, with business operations spread across the world, which is why they can develop rapidly and have astonishing performance driving the continuous growth of their stock market value. There are many global companies in the U.S., such as Coca-Cola, Microsoft, Nvidia, etc., which are necessary conditions for becoming super bull stocks.

Chinese A-share listed companies are also increasingly showing global companies. For example, Hikvision's security equipment is sold worldwide, Angel Yeast's product market share is already in the top three globally, and companies like Roborock's sweeping robots, and CATL's batteries, etc.

4. High Market Expectations

Currently, the U.S. market has high expectations for the artificial intelligence industry, with AI development booming and continuously creating "miracles." This has led the market to assign a high valuation to tech stocks related to artificial intelligence, with stock prices soaring one after another.5 Market Overheating

The current market atmosphere in the United States is overheated, especially with people being overly optimistic about the future development of technology stocks. At present, Nvidia's price-to-earnings ratio is as high as over 60 times, which shows the market's craze for technology stocks. Under this atmosphere, the market value of the six major technology stocks has rapidly inflated, accounting for 30% of the S&P's weight. This high valuation also means that there is a certain potential risk, and the valuation of these six major technology stocks may also have a certain bubble at present.

In summary, the later stage of a bull market often sees only a few stocks soaring, while other stocks begin to fluctuate and adjust. The current U.S. stock market has shown this state, with Nvidia, Microsoft, Apple, and other six stocks continuously rising, while the trend of other stocks begins to stagnate. Although this does not necessarily mean the arrival of the top, it is definitely not a good signal.

On Zhihu, several young people commented on my article about being bearish on the U.S. stock market, saying: "You are bearish on the U.S. stock market every day, but the U.S. stock market rises every day."

Seeing such comments, I can't help but sigh - the more ignorant, the more they like to speak!

Taking this opportunity, I will roughly explain how to judge the top of the market. I have never made a mistake in judging the top of the market for decades.

1 The top is an area, not a point or a line.

For example, many years ago, I pointed out that above 4500 points of A-shares is the top. I was cleared at 4693 points at that time, and the market rose to a maximum of 5178 points. If according to the cognition of these young people - my analysis at that time that above 4500 points is the top is a wrong judgment. My clearing near 4700 points is also too poor, I should sell above 5100 points to judge correctly, and sell at 5178 points is perfect analysis.

Novices and rookies always believe that humans have the ability to accurately judge the top of the market. They believe that after pointing out which point is the top, the market should rise to that point and stop immediately, which is a successful judgment of the top. I tell them today, what they say is that the kind of person who makes such an accurate judgment is not a person, but a god. That is something that only great gods like Buddha, Yuan Shi Tian Zun, and Jesus can do.The market judgment of human heads will inevitably have errors, and it is normal to have errors of about 20%-30%. Those who pursue precise point predictions and believe that only those who buy and don't fall, and sell and don't rise are investment experts are completely leeks, and they will eventually be ruthlessly harvested by the stock market.

1. The judgment of the head is a probability

Even if my judgment that the U.S. stock market is currently at the top is ultimately proven wrong by facts, I still think my investment logic is fine. I will continue to use this investment logic to judge the global stock market for the rest of my life, and it will never change.

Investment should pursue the correctness of logic, not the correctness of the result. For example, a person who is 1.6 meters tall, smokes and drinks every day, stays up late, and weighs 250 jin (about 125 kg), I judge that his life span is difficult to exceed 65 years old. This is a judgment from a probability perspective. In the end, he lived to 72 years old.

Did my judgment logic make a mistake? No. Next time there is a similar person and thing, I will still judge like this, and I will still think that he is likely to live less than 65 years old. Because this is a judgment from a probability perspective, most people who do this do not live to 65 years old. I will not change my investment logic because of some occasional individual events.

There are many trolls on the Internet. When you say that smoking and drinking are harmful to health, he says that his grandmother is 98 years old and still smokes and drinks. Such trolls are, after all, people with low cognition. They don't even have the most basic probability thinking. How many such grandmothers does he have? Are there more people in the world who smoke and drink and live to 98 years old, or are there more people who don't have a smoking and drinking hobby and live to 98 years old?