What would a glitzy investment conference be without a little Mag Seven banter?
“The risk is simple: These stocks don’t perform well,” Marc Lasry, founder and CEO of Avenue Capital Group, told Yahoo Finance at the Milken Institute Global Conference on Monday.
Lasry was answering a question about the risk of overcrowding among tech companies like Nvidia (NVDA), Microsoft (MSFT), Apple (AAPL), Amazon (AMZN), Google (GOOG, GOOGL), Meta (META) and Tesla (TSLA) – aka as the Magnificent Seven.
“What has happened is that people are nervous and investing in things that they know really well and that they believe will exist,” Lasry added. “But I don’t know what will happen next year. As far as credit goes, I know you have all these options.”
Lasry, a former co-owner of the Milwaukee Bucks, has been investing in credit markets for more than four decades and has a reported net worth of $1.9 billion.
So suffice it to say that Lasry has experienced quite a few investment cycles and market trends.
And the Mag Seven could be described as a stunner.
Overall, the Mag Seven accounted for about 37% of the S&P 500’s 10.2% gain in the first quarter, according to data from S&P Global Indices. In 2023, this cohort accounted for about two-thirds of the S&P 500’s rise.
The group’s optimism reflects earnings enthusiasm for everything from Nvidia AI chips to Microsoft’s Copilot productivity tool.
But as investors now take a closer look at Mag Seven amid higher interest rates, the shares’ performance has slowed.
Marc Rowan, CEO of Apollo Global Management, stated: “I am not in the stock picking business. But very few people come every day and try to buy stocks with a P/E ratio of 45 or 50. “That’s just not what we do.” (Disclosure: Apollo Global Management is the parent company of Yahoo Finance.)
“I look at the broader trend. We used to have 8,000 public companies. Now we have 4,000 public companies,” he added. “People think that most of the action happens in public markets. 80% of companies generate a turnover of over 100 million and 80% of jobs are in private companies.”
Brian Sozzi is Editor-in-Chief of Yahoo Finance. He also hosts the “Opening bid“Podcast. Follow Sozzi on Twitter/X @BrianSozzi and further LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email [email protected]. Are you a CEO and want to join Yahoo Finance Live? Email Brian Sozzi.
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