To tell you the truth, I am almost full circle with Meta. Meta is the big company that has Facebook and Instagram. And really they do very well, they are a great company.
But in the name of not wanting to own two companies with the same business model, I don’t want to own Meta as long as I own Google. Like Meta, Google makes most of their revenue selling advertising. And Google is the bigger company. I could have really gone either way, but I went Google.
Why not own two companies with the same business model? 1. When both have the same business model, anything that affects one affects the other. So I would own two times what I should and could probably find another similarly great company with a different business model. 2. Generally I think one has to be better than the other. My judgement/choice between these two great companies is Google.
Am I wrong or am I right? I think Meta’s numbers look better currently but sometimes you just have to run with what you picked. The long-term difference between the two is probably slim and it’s not worth making the change mid-stream. That’s my story and I’m sticking to it.
In the mean time, I’m holding Apple which makes me look kind of silly at the moment. I could own a great company Meta or I could own Apple which looks like a good company of the past. I do still like Apple. While they are a slow grower, their return on equity is very good. Debt is much higher than in the past but their debt originated when interest rates were super low. Apple used this debt to buy back shares.
So then is my choice to sell Apple and buy Meta? Apple’s share price has grown more than Google in the past year making it my #4 individual stock. And buying Meta instead of apple still has the problem of owning two companies with the same business model. Oh my.
By the way, my #2 stock is Chase or JPM. Something that has nothing to do with Technology. The gain there has been very good but nothing earth shattering. I really think that most stocks, barring Nvidia, have not been in favor with the market so they have not done so well regardless of how good they are.
In the mean time, Berkshire Hathaway (BRK.A & BRK.B) has become the first non-technology company to have a market cap of $1 trillion. Berkshire Hathaway is currently being run by Warren Buffett who is 94 years old. I do own some Berkshire because it doesn’t move a whole lot and has made about 20% in gains in the past year. I’m also mindful of the Buffett Indicator and I don’t think Berkshire is so hurt in a market downturn.
Gold has been super recently also. I owned some GLD and SVOL until recently to protect against a downturn but decided to bulk up on my #1 stock instead. A move that didn’t turn out well in the near term. SVOL is an ETF that is meant to protect against volatility and pay 16% in dividends over a year. It did well in the recent shock that sent volatility spiking.
Sometimes the best thing to do is nothing. And fish. I fish a lot but am keeping nothing. I think this is a sign of maturity.