Analyzing the varying levels of magnificence and risk in the M7 stocks

  • Some of the Magnificent Seven stocks are more magnificent than others
  • Investors avoiding the M7 in an attempt to reduce risk are misguided
  • Exposure plays a significant role in determining returns
  • Meta and Nvidia stand out with significant residual returns
  • Apple and Microsoft’s returns are mostly owed to risk exposures
  • The M7 stocks are diversified and do not raise the overall market’s risk profile

According to Benson Durham’s analysis, some of the Magnificent Seven stocks, namely Apple, Amazon, Alphabet, Meta Platforms, Microsoft, Nvidia, and Tesla, are more magnificent than others. Investors who avoid these stocks in an attempt to reduce risk are misguided, as the group is plenty diversified despite its seeming homogeneity. Durham’s analysis focuses on exposure and how much of each stock’s returns can be attributed to systematic risk. Meta and Nvidia stand out with significant residual returns, while Apple and Microsoft’s returns are mostly owed to risk exposures. Overall, the M7 stocks do not raise the overall market’s risk profile. It’s important to note that these analyses only reflect realized returns and do not indicate future performance or fundamental valuations.

Public Companies: Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA), Tesla (TSLA)
Private Companies:
Key People: Benson Durham (Head of Global Policy and Asset Allocation at Piper Sandler)

Track all markets on TradingView

Factuality Level: 7
Justification: The article provides analysis and opinions on the performance of certain tech stocks. While it does not contain misleading information or sensationalism, it is based on the author’s analysis and interpretation of data, which may introduce some subjectivity and potential bias. The article does not provide a comprehensive analysis of all relevant factors and does not consider future market conditions. Therefore, the factuality level is rated at 7.

Noise Level: 3
Justification: The article provides a brief analysis of the performance of the Magnificent Seven stocks and their returns. It discusses the concept of risk and reward in investing. However, the article lacks depth and does not provide actionable insights or new knowledge. It also does not support its claims with evidence or data.

Financial Relevance: Yes
Financial Markets Impacted: The article discusses the performance of several tech stocks, including Apple, Amazon, Alphabet, Meta Platforms, Microsoft, Nvidia, and Tesla. It provides analysis on their returns and risk exposures, which may be of interest to investors in the financial markets.

Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article primarily focuses on the financial performance of tech stocks and does not mention any extreme events or their impacts.

Reported publicly: www.marketwatch.com