Big Tech: A Patriotic Investor’s Dilemma
Big Tech’s recent strong stock performance and large size creates a conundrum for politically- conservative investors who want to align their core beliefs with their investments. Many conservative investors begrudgingly own these left-leaning companies due to not wanting to sacrifice performance.
The reference to Big Tech companies includes the likes of Amazon, Google, Facebook, Twitter, and Apple, due to their recent collective efforts to censor free speech in America. Strictly speaking, they are all not tech companies. Yet in the eyes of the public, they are part of the Big Tech monopoly and will be considered as such for this article.
Is now the time to boycott ownership of Big Tech?
The First Amendment, which protects our freedom of speech and religion, is the bedrock issue that strongly unites all conservatives. These Big Tech companies are actively undermining our freedom of speech and are emboldened by the recently elected Democratic majorities. It is not only the liberal media, liberal CEOs, and campaign contributions that we have grown weary of, but Big Tech companies now have the power to suppress conservative voices, destroy companies, and deny conservatives access to the technological infrastructure that they monopolize. This includes access to e-commerce, cloud technology, credit card processing payments, and more. Big Tech has clearly demonstrated an unabashed and unrestrained willingness to use their power to economically influence those they disagree with. If these companies continue to run roughshod over the conservative beliefs of their shareholders, the silent majority will become the silenced majority in short order.
Results from a recent Gallup poll conducted earlier this year show positive views of Big Tech have fallen 12 percent since late 2019, and the majority of poll respondents want more government regulation of technology companies. Given the customer centric business models and rapid growth necessary to justify recent valuations, how can this level of dissatisfaction not affect the bottom line? Big Tech executives fail to realize that the implementation of liberal-leaning policies may result in lost revenue, a growing opportunity for potential new competitors, and vulnerability to government anti-trust actions.
Certainly, the general market environment should be considered and there are warning signs that Big Tech’s run cannot last forever. First, the massive economic stimulus is nearing an end. An article recently published by Bank of America, titled Big tech-led equity inflows fueling ‘mother-of-all asset bubbles’, states that, “The U.S. Federal Reserve for instance has been purchasing bonds at a record pace, doubling its balance sheet to nearly $8 trillion in less than a year. During the same period, the five biggest tech stocks have seen their market value double.”
The U.S. Federal Reserve for instance has been purchasing bonds at a record pace, doubling its balance sheet to nearly $8 trillion in less than a year. During the same period, the five biggest tech stocks have seen their market value double.
Second, certain technical evidence, such as drastic increases in P/E ratios over the last year and growth’s dominance over value dating back several years, has created a paradox for value investors who are having their long-term underlying assumptions challenged by these factors. The last time Big Tech was this high as a percentage of the S&P 500, was 1999. Everyone should recall the dotcom bubble burst of 2000, which was signaled by prevailing astronomical valuations and P/E ratios of tech companies. Today’s market environment is eerily familiar in that regard, and history tends to repeat itself.
If you have been begrudgingly or unknowingly holding onto Big Tech stocks, this confluence of recent events highlights the need for a shift towards greater conservative investing advocacy. The American Conservative Values ETF (NYSE: ACVF) aims to put that advocacy into action by aligning your investments with conservative values. Tom Carter, ACVF’s portfolio manager asks, “Why invest in companies with your hard-earned savings that are not working to maximize your financial return? Companies whose conduct is so egregious that conscience out weights risking some potential performance.”
When speaking with politically-conservative investors, most would like to align their investments with their political beliefs yet are concerned about performance and the lack of products designed for them. The American Conservative Values ETF was created to address this exact concern.
The investment philosophy of ACVF is based on the belief that politically-active companies may negatively impact their shareholders’ returns. The fund’s portfolio seeks to balance advocacy of conservative investing without sacrificing performance by focusing its boycotts on the worst liberal offenders. By investing in a portfolio that strips away the worst offending companies that support the liberal agenda and maintaining a diversified portfolio, politically-conservative investors can preserve performance while simultaneously aligning their investments with their political beliefs.
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