Chart Talk: February 14th, 2024


After a Parabolic Rise During the Late 1990s, the “Four Horsemen” Went Nowhere For A Decade

During the late 1990s as the internet was becoming anincreasingly more integral part of our everyday lives, Cisco Systems (CSCO),Intel (INTC), Microsoft (MSFT) and Oracle (ORCL) played important roles.  They became known as the “four horsemen” for theiroutsized influence on the stock market as a result of their technological innovation,market capitalization and market penetration. This is not unlike today’s “Magnificent Seven” which is comprised ofleaders Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Meta Platforms (META),Microsoft (MSFT), Nvidia (NVDA) and Tesla (TSLA).


As the graph below illustrates, the share price gainsthat investors in the Four Horsemen reaped during the parabolic move during the1990s reversed itself shortly after the turn of the millennium beforeflat-lining for the remainder of the decade as a result of having risen tounsustainable levels regardless of their still stellar business fundamentals.

Although we see parallels between the Magnificent Sevenand the Four Horsemen in part due to the excitement over the potential ofArtificial Intelligence (AI) similar to that of the internet twenty-plus yearsago, over the intermediate- to long-term we believe valuations are reasonableand to date, there has been no parabolic move. That said, for proper portfolio construction it is important to remaindiversified over several different industries.

This presentation is not an offer or solicitation to buy or sell securities. The information contained in this presentation has been compiled from third party sources and is believed to be reliable, but its accuracy is not guaranteed and should not be relied upon in any way, whatsoever. Fagan portfolio characteristics and holdings are subject to change at any time and are based on a representative portfolio. Holdings and portfolio characteristics of individual client portfolios may differ, sometimes significantly, from those shown. This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities listed.

Additional information including management fees and expenses is provided on our Form ADV Part 2. The actual return and value of an account fluctuate and, at any time, the account may be worth more or less than the amount invested. Bond Investments are affected by interest rate changes and the credit-worthiness of the issues held in the portfolio. A rise in interest rates will cause a decrease in the value of fixed income positions. Past performance results are not indicative of future results.”

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