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Tesla and Apple: Doomed in 2023?

The world can change in very, very dramatic ways...

Posted January 4, 2023

"The world can change in very, very dramatic ways." — Warren Buffett

Warren Buffett’s Berkshire Hathaway held its annual shareholder meeting in May 2021.

As he always does, the “Oracle of Omaha” offered up some sage investing wisdom that we should be mindful of as we invest in the new year.

At the meeting, he looked at the largest 20 companies by market cap on the New York Stock Exchange in 1989 and pointed out something odd, almost disturbing...

It was that none of the top 20 companies in 1989 were the top 20 companies at the time of the meeting.

Here were the top six companies in 1989:

  1. Industrial Bank of Japan
  2. Sumitomo Bank
  3. Fuji Bank
  4. Dai-Ichi Kangyo Bank
  5. Exxon Corp.
  6. General Electric

At the time, Japan had a booming stock market, which is why so many of the top stocks were from Japanese banks and companies.

Just over 30 years later, the stock market looks unrecognizable.

Here are the top six at the time of the shareholder meeting in 2021:

  1. Apple
  2. Saudi Aramco
  3. Microsoft
  4. Amazon
  5. Google
  6. Facebook

Buffett expounded a prescient message after his presentation, one that could spell doom and gloom for both Tesla and Apple in 2023.

This was his lesson to investors...

Companies Change

It’s exceptionally difficult, if not futile, to cherry-pick stocks.

At the end of the day, the top companies will change over time.

It doesn’t mean that these companies are bad investments, especially when factoring in dividends, but Buffett believes investors should diversify their holdings.

As the Oracle said, “One thing it shows, incidentally, is it’s a great argument for index funds. The main thing to do is be aboard the ship.”

We don’t know what factors might affect a stock’s near-term price action.

All we can do is be in the markets in the first place and catch the tide as it lifts all boats.

Industries Change

The second key takeaway is that the dominant industries change.

It’s just human nature, as fads come and go, especially in the tech industry.

But why are the top companies so dramatically different in Buffett’s example?

Well, as Buffett put it himself, “The world can change in very, very dramatic ways.”

This is probably the most important takeaway from the entire shareholder meeting.

Just think about how much has changed since May 2021...

The world has in fact changed in dramatic ways, and in ways that none of us could have predicted.

And it’s these changes that directly affect the market caps of the top companies on the market.

And while we can’t predict which companies will rise and fall, we can look at the trends and themes to make the best educated guess.

The World Changes

Not only do the top companies and sectors change, but the countries producing the top companies change as well, albeit not as dramatically.

According to Squord, a company that specializes in African capital markets, this is an argument for investing globally.

After the shareholder meeting, Squord posted, “The top 20 list will continue to have companies from all over the world. There may always be a dominant country and legacy attendees, but there will always be new entrants. That is why being globally diversified (as an investor and as a company) is not a bad idea. With globalization, the company’s country of origin may even be an outdated concept.”

The writer finishes by saying they are still bullish on Africa.

And they may be on to something here, but not in the way you might think.

As of this writing, the top five companies by market cap in the stock market today include Apple, Microsoft, Google, Amazon, and Berkshire Hathaway.

As the world starts to shift, will these companies remain at the top?

Tesla and Apple Are Struggling

While it’s true companies like Apple and Tesla have helped society, they’ve also exploited the lives of millions.

And as the world digests the harm these companies have done, we might see a major shift in the technologies we use in the near future.

Electronics manufacturers, specifically those using batteries — which is basically every major manufacturer, including Tesla, Apple, and Samsung, to name just a fraction — are in serious trouble.

Siddharth Kara, a Harvard professor and expert on modern-day slavery, human trafficking, and child labor, is releasing a book this month called Cobalt Red: How the Blood of the Congo Powers Our Lives.

Two weeks ago, he spoke with Joe Rogan about the horrors of cobalt mining in the Congo.

Cobalt is an essential rare earth metal found in any electronic device that has a rechargeable battery.

I suggest watching or listening to the whole episode if you have time.

It shows the exploitation and criminality at the bottom of our electronics supply chain.

The fallout from this will be massive.

The market won't be kind to companies like this.

Tesla’s down 10% to start the year.

Apple's down 15%.

Bloomberg posted this week that Elon Musk has become the fist person ever to lose $200 billion.

Things aren’t looking good for Big Tech.

Maybe it’s why Musk sold billions of dollars’ worth of Tesla stock this year.

In December, he sold nearly 22 million shares, worth $3.6 billion.

That’s a gigantic sell!

In all my time covering insider trading, I’m not sure if I’ve ever seen such a massive dumping of shares.

It’s unprecedented, and it’s drawing a lot of attention.

Now, while it’s true half of Tesla’s new batteries are cobalt-free, it feels like it’s too little too late.

It’s probably why former Tesla employees are fed up with Elon Musk and starting their own company.

In fact, this new EV company is trading for less than $4, giving investors a shot at huge potential gains.

This could be bigger than Tesla.

To get the new year started off right, we’ve put together a presentation on the whole story.

Check it out here.

Stay free,

Alexander Boulden
Editor, Wealth Daily

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After Alexander’s passion for economics and investing drew him to one of the largest financial publishers in the world, where he rubbed elbows with former Chicago Board Options Exchange floor traders, Wall Street hedge fund managers, and International Monetary Fund analysts, he decided to take up the pen and guide others through this new age of investing.

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