Good morning. Election week, and everyone is expecting a Republican blowout. No need to complicate things: with inflation at 8 per cent, the president’s party gets whipped. The rest is noise. We expect markets, in the short term at least, to ignore the whole thing. Email us: robert.armstrong@ft.com and ethan.wu@ft.com.
Big tech blues (part 1)One annoying thing about journalism is that when you say something stupid it leaves behind a permanent record. In Unhedged’s first year or two, I have written a lot of nice things about the biggest US tech companies. To sum up, the house view is that companies like Apple, Amazon, Microsoft and Alphabet are “smart, relatively low-risk things to invest in” even when their valuations look a bit high. They have immensely strong competitive positions in industries that grow much faster than the economy; and they are hugely profitable, so they can invest heavily in strengthening those competitive positions and maintaining their growth.
I have largely dismissed the argument that as rates rise, fast-growing tech companies will be hit particularly hard. I’ve argued that Amazon looks pretty cheap (it is down 24 per cent since). I have called Apple “the ultimate quality stock.” I’ve made the case that big tech will be a good place for investors to sit out a downturn. And on and on.