The Growth Religion And Big Tech Exceptionalism

The Growth Religion And Big Tech Exceptionalism

A persistent theme in these pages is the notion that being overweight America's tech titans is unavoidable. That's true in a literal sense given their concentration at the index level (figure below), but it's also true in the sense that being underweight or exhibiting an aversion to the FAAMG cohort is tantamount to being hostile to growth. With the tech giants, growth is something more than an investment style -- it's not just a thematic preference. These companies quite literally account for
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2 thoughts on “The Growth Religion And Big Tech Exceptionalism

  1. “Policymakers will pull every lever in pursuit of growth,”

    I’m not totally convinced about this. Policymakers (politicians?) may run on a platform of growth but it seems to me “growth” to them means growth in profits via tax cuts and other corp give-aways and subsidies so that companies will continue to line their pockets
    It’s why we’ve had no infrastructure investment – because policymakers couldn’t figure out how to direct that spending to benefit corporations’ profits. They, mostly Republicans, couldn’t figure out how to make every road and bridge a toll-way

    I’m not even sure the C Suite cares about growth except in stock prices.

    Investing in growth requires some foregoing of short-term pleasure for long term gain, and C Suite compensation packages typically aren’t geared to this. With stock option compensation and a focus on quarterly earnings, the focus is not on the long-term. Witness the stock buy-back fever over the last several years. That was all about propping up the stock price so those option compensation packages were worth more. That was money that could’ve been used for more long-term thinking and investment.

    I hate that I’ve become so cynical.

  2. You’re not cynical- you’re realistic. The behavior of the elite is a response in large part to incentives, and also to a high degree of tolerance for conflict of interest. Throw in the big trade: money for power and power for sale to the highest bidder. Sam the Plumber said on tape: a gentleman is a guy who stays bought when you buy him….

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