The world’s biggest seventeen companies have added approximately $1.7trillion to their stock market capitalisations since the beginning of the year. This means the values of all their shares in issue have risen by this sum. Yes, that is despite the Pandemic problems. So effectively, whilst they fell a little in the Spring too, they have rebounded and are now higher still. They are all ‘tech’ companies of some type, led by Amazon. This sum of ‘added value’ is not far from the whole value of the British Stock market, to give you a reference point.

Sure, technology has been relatively unscathed and indeed, several such companies have benefited handsomely from the lock-down but will that be permanent? The feeding frenzy pushing ever more cash into exactly the same colossally priced holdings could lead to an almighty correction in them, as greed and the fear of ‘missing-out’ come home to roost. It hasn’t happened yet and many argue it won’t (and that several of these companies have colossal cash balances too) but the proportionate value all these companies versus all the others represents one of the biggest prospective bubble exposures since the Dot.Com one bursting in 2000 (when technology, telephony and media at one stage represented 40% of the value of all the world’s stocks). Indeed, whilst it may be an old record I am playing, the comparative excessive ratings of ‘growth stocks’ which all these now represent versus old-fashioned ‘value’ is at one of the biggest gaps ever seen. Take the UK and remember that in 2000, Vodafone was the ‘then’ darling and it represented 16% of the value of the whole of the FTSE100 and the shares were over £4. They are now around £1.25.

Many investors are sanguine about all of this and as the same over-hyped stocks fill ‘cheap’ index trackers (which are weighted towards the biggest companies of course) and we have also found they have been high-up in the stakes of ‘socially responsible investments’ too (despite seriously questionable practices and especially about taxation from several of them!), thus giving these concepts an undeserved air of performance on the back of that. This is likely to mean more people than ‘normal’ out there may have a big shock at some point as a rebalancing is so long overdue. Maybe what the recovering world needs to do is a globally agreed accord to have an international super-tax to take the odd trillion or two from these firms to help pay for the recovery from the Pandemic. That would work well and would only repay what they have taken already and the absence of equitable tax payments which they should have been making to date. However, governments had better act quickly as the froth could soon all evaporate…