top of page
  • Doug Wakefield

The Trillion Dollar Stock Question

How many people do you know who are billionaires? Unless you are a billionaire, probably not too many. How many people do you know who run companies worth a trillion dollars?

Currently none, but that could change in August.

The last full week of July has presented us with three possible candidates for the trillion-dollar circle; the pinnacle of stock market mountain.

First up, Google, who leaped over $50 billion in market cap on July 23rd after releasing its earnings. That day its stock market value reached $875 billion for the first time. (1)

Next up is Amazon. After another blockbuster Prime Day on July 16th, the stock reached $1858. According to Reuters, the stock market value of the company broke through $900 billion, reaching $902b. Climbing to a current high of $1889 today after releasing its earnings yesterday, the company edged even closer to that $1 trillion mark. (2)

Last on our current list of top contenders for the $1 trillion mark is Apple. At $195, reached for the first time on July 26th, the stock market value of the company stands around $950 billion. (3)

Yet not every big tech celebrity has leaped on earnings. While one can jump $50 billion in a day, another can make history, getting caught in an avalanche of selling, losing over $100 billion in a day.

Last week, Netflix dropped over $50/share the day it released earnings on July 16th. (4)

Should traders who loaded up on the NYSE’s new FANG+ options, launched a little over a month ago on June 11th, be concerned because the index contains only 10 stocks, three of them being Netflix, Tesla, and Facebook? (5)

Are the millions of investors holding an active or index fund tracking the S&P 500 or NASDAQ 100 thinking how this type of “negative adjustment” might impact their own investment goals

when this cycle goes from peak to trough next?

When we came over the top in 2000, Microsoft, Intel, and Cisco were dominate stocks in the NASDAQ 100. Between their 2000 highs and 2002 lows, they fell 65%, 80%, and 90% respectively.

When we came over the top in 2007, Apple, Google, and Microsoft were dominate names in the NASDAQ 100. Between their 2007 highs and 2008/2009 lows, they fell 61%, 67%, and 59% respectively.

Google, Amazon, and Apple investors could pop the cork in celebration if this first in history trillion-dollar milestone happens soon. However, these recent swift drops and the many warnings of severe weather ahead warn us that reaching a summit is not a time to sit back and relax.

“The popular wisdom of the time had it that if an investor stuck to index funds, he reduced risk by spreading his money around. What the received wisdom ignored was the price of the index. When the S&P 500 is driven by highfliers, an investor who buys the index is, by definition, buying high.” Bull: A History of the Boom, 1982-1999, Maggie Mahar, 2003, pg 209


What questions are you asking right now with so much history taking place every month? What US stock market record could be broken in August? What other trillion-dollar level could be broken in the next month or two?

We will come over this top like the previous cheap money mountain that peaked 11 years ago. What changes are you discussing with others and what actions are you taking?

1,204 views0 comments

Recent Posts

See All
bottom of page