by, Individual Security Subcommittee Members
Kittiwat Sripom, CFP® & John Reimer, CFA
The US House Judiciary Committee has passed a six-bill package aimed specifically at Apple, Amazon, Alphabet, Microsoft, and Facebook to convince congress that these big-tech companies are anti-competitive, have too much power and need regulation.
Antitrust and Regulation has always been, and will always be, a headwind and factor for Big Cap technology companies. However, it does not change our opinion on them as an investment. In our view, these are great companies that innovate very well. They continue to be good investments regardless of what the government or the lawsuits bring; at worse case, splitting up the companies into parts. If this were to happen, we would continue to own most of these stand-alone companies. They are well capitalized, have good leadership, and make great products and customer experiences. They also continue to invest in new growth opportunities and innovations to better our lives.
The Technology space is constantly changing and fast moving. By the time the government finally agrees on any punitive action, the competitive landscape has already changed, and new companies are created to take the place of the companies the government is after. Not only does the technology landscape change, but so does the political landscape. Over time, governments change and can shift their attention to other targets to suit their agenda.
To summarize, although there is constant anti-trust/regulation headline risk, we believe big tech makes for good long-term investments and we will continue to invest in innovative, well-run companies with strong leadership, solid balance sheets and robust earnings growth.
Disclaimer: This commentary is intended for informational purposes only. No decisions regarding investment strategies should be made based solely on this presentation and nothing shared should be interpreted as investment advice. Any investment decisions should be discussed with your Advisor. Finally, all investments carry the risk of loss, including the permanent loss of principal and past performance is not a guarantee of future results.
Photo by James Yarema on Unsplash
