Another brief but important point on the direction of the broader market:

The fact that the market may not plummet further does not mean that individual companies or even whole sectors will not experience further declines or simply underperformance versus their peers.

As we alluded to above with Amazon's earnings, this week saw some incredible swings in certain individual company's earnings.

Two powerful and opposing points on this theme:

• Facebook (or, shudder, Meta as it is now called) plunged over 26% when their earnings disappointed on Thursday. This wiped out over $232 billion in market cap, the single biggest day ever.

• Meanwhile, another social media company, Snap (formerly Snapchat) saw their shares collapse 24% before their earnings. When they reported strong results and even - gasp - a profit their shares reversed the whole decline and finished up 58%.

Three quick points:

1. This is the definition of a stock picker's market. Reputations and a lot of money will be made

2. This underlines the value and importance of passive investing. A lot of amateur investors likely suffered from these swings.

3. The Meta/Facebook drop exceeded the individual market capitalizations of 472 companies in the S&P 500.

So, the single day move in a single company exceeded the value of well over 90% of the companies in the large company index.

That is stunning and reminds us that Big Tech is still a very big! And a sector with seriously high - dangerously high - expectations attached.

If these companies no longer trade as a block and also struggle to meet the sky high expectations then they could see very rapid and very painful "re-ratings" as their stock prices plummet back to more realistic expectations.

You saw that occur last week and it has happened before, of course. Who remembers that Apple plunged 8% (and well over $180 billion in market cap) in early September of 2020. T

The hardware company has added over a trillion-with-a-"T" in value since then but these days the inflation+higher rates+falling revenues should mean a far tougher road for the likes of Meta (Facebook).

An index of the so-called FAANG Big Tech stocks has underperformed the broader market all year. That doesn't mean these companies are necessarily failing, just that they are too expensive and too large to grow as fast as they once did.

One of the bigger strategic points we have made with our company is that market leadership changes over time. It is very, very rare for one company to remain the biggest and best performing for more than a decade or two. It is always just better and easier to own the market and decide what you don't like instead.

Could we be on the cusp of a similar rotation away from the most famous (and most overvalued?) Big Tech stocks?

Could the so-called "FAANG" stocks continue to underperform?

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Have questions? Care to find out more? Feel free to reach out at contact@pebble.finance or join our Slack community to meet more like-minded individuals and see what we are talking about today. All are welcome.