Fisher Investments Reviews its Outlook for the "Magnificent Seven"

Transcript

Ken Fisher:

So there has been an inordinate amount of discussion throughout the course of 2024 about the Magnificent Seven. So much so, that as stocks, I don't even need to talk to you about what they are. If you have any doubt before you hear the rest of this video, you might just go and Google the Magnificent Seven and it'll take you right to it. The seven growthy, prime big' uns.

Now, mind you, I've always thought that was a nonsense notion because for the most part, when you look at the world throughout this bull market, growth stocks have done better than value stocks, and big stocks did better than small stocks. So yes, it was true that the big, growthy tech stocks led the charge overall. And Communication Services' tech-like stocks, which would include things like Meta, let's say—one of the Magnificent Seven. But my point would be it was a much broader bull market than that all along, much broader than most people gave it credit for, and it did, mostly, the entire bull market has resided mostly on the side of growth— not so much on the side of value, although this year value has started to catch up.

Here's the point that I want you to see: Whether we look at those Magnificent Seven, or growth stocks as a whole or tech as a whole. However you want to define that—Nasdaq as a whole— has been simply true that not if the market's up by one tenth of 1% or down by two-tenths of 1%. But if the market's up by a half of 1% to 1.5%, in a given day, we're down—same amount. Growth stocks have done that and more. When it's up, growth stocks have gone up more. Mostly when it's down a lot, growth stocks have gone down more. Mostly growth stocks have led when the market's up, like when the market's down.

You get a few months where the market wiggles sideways. Growth stocks lag a little when the market roars. Growth stocks lead if you're a bull looking forward. If you think the market's going up, you should expect the Magnificent Seven to continue to do well. Will they necessarily do better than everything? No. But they never actually did. The fact is, they did as a group better than most groups you could find. I think that will continue to be the case because I'm optimistic on the market as a whole moving forward. I might be wrong, of course, but I'm just going to tell you, you watch it day-by-day. You see the market up by 1%. It'll almost always be true —not every day, but almost every day—that tech was up more. You see the market down by 1%. It's true. Not every day, but almost every day. You see tech, growth and the Magnificent Seven down by more than one. It's just a question of direction, in my opinion, at this point in time. Not always at this moment in time.

So do I think they'll do well ahead? Yes I do. Am I certain about that? I'm never certain about almost anything. This is all a probabilities game, not a certainties game. But I can tell you it's a certainty that almost every day in 2024, when the market's up markedly, tech's up more than that, growth's up more than that. and the Magnificent Seven is up more than that. Market down markedly, tech down more than that, growth down more than that, Magnificent Seven down more than that. I think it's largely directional, right? Thank you so much for listening to me.

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