Anyone recall the logic in the 1960s and 1970s that suggested there were only 50 stocks one needed to look at, and those 50 stocks could never go wrong? That theory was labeled the "Nifty-Fifty".
Nonetheless, the long bear market of the 1970s, which lasted until 1982, caused valuations of the Nifty-Fifty to fall to low levels along with the rest of the market, with most of the Nifty-Fifty under-performing the broader market averages.
The "Nifty-Fifty" of the 1960s gave way to the "Four Horseman" of the tech era: Microsoft (O:MSFT), Dell, Cisco (O:CSCO) and Intel (O:INTC). What would have happened if you invested in these 4 in 2000?
Microsoft
- Microsoft opened the year 2000 at $41.19.
- It is now $53.85.
- Congratulations, you are ahead, but it did take 14 years. Counting dividends, you are now well ahead.
Dell
- Historically Dell last traded at $13.73 on 10/29/2013.
- It opened the year 2000 at $50.40.
- You are seriously underwater and will never catch up. Dell is now private.
Intel
- Intel opened the year 2000 at $29.65.
- It is now $33.16.
- Congratulations, you went ahead in 2014.
- Does it feel like it?
Cicso
- Cisco opened the year 2000 at $47.43.
- It is now $27.12.
- You are seriously underwater still.
If you bought the hype-of-the-day "Four Horseman" in 2000 and held on, you are still underwater fifteen years later.
Recall that EMC (N:EMC), Oracle (N:ORCL), Sun Microsystems, and Juniper Networks (N:JNPR) were all regarded as must own for the long haul "gorillas".
New Four Horseman
On January 6 2012, GeekWire proclaimed Meet the new ‘four horsemen’ of tech: Sorry, Microsoft, Dell, Cisco and Intel.
Oh, how the technology landscape has changed. Ten years ago, the industry was dominated by names such as Microsoft, Intel, Dell and Cisco.Fast forward to 2012, and the makeup looks quite different. CNN recently surveyed 30 technology experts and thousands of readers to come up with what it dubbed the Four Horsemen of tech.
Respondents were asked to choose only from publicly-traded companies, so Facebook (O:FB) didn’t make an appearance.
Apple (O:AAPL) easily was the top vote getter, followed by Google (O:GOOGL), Amazon.com (O:AMZN) and — an oldie, but a goodie — IBM (N:IBM).
IBM, Apple and Amazon certainly could qualify as comeback stories, while Google has yet to really be tested in terms of its market dominance in Internet search. (Possibly signaling a fall).
Nonetheless, what’s fascinating is how Microsoft no longer makes the cut. (In reader polling, IBM edged out Microsoft with 67 percent of the vote). Microsoft is still a juggernaut, but as CNN’s editors point out “the PC is no longer driving technology growth.”
Final Four, Elite Eight, Sweet Sixteen
Amazon, Google, Apple, and IBM were billed as the new four horsemen in 2012.
Oracle (N:ORCL), Salesforce (N:CRM), Microsoft, and Cisco were in the "elite eight" with Qualcomm (O:QCOM), Verizon (N:VZ), VMware (N:VMW), Samsung (KS:005930), Nuance (O:NUAN), eBay (O:EBAY), ARM Holdings (L:ARM), and Dell rounding out the "sweet sixteen".