Except for Apple, because Mr. Buffett loves them, State Street (STT), Blackrock (BLK), and Vanguard are top three holders and own 18.65% of AAPL, 16.49% of AMZN, and 19.79% of MSFT.
Here’s Why It Matters: Now, just admire in Congress, if one party has 20% of seats, they can’t really make or break any decision by themselves.
But they can still influence them.
And because money leads to influence and that’s what we’re talking about here, these companies can largely influence the plans, the research, and the funding of every business on the S&P.
If you’re a company and don’t want to comply with Blackrock’s wishes to be environmentally friendly with your new venture, what will you do when Larry Fink pulls half of what they own in your company… potentially tens of billions of dollars?
Bottom Line: In this story, playing into small-cap companies, typically under $20 a share, who aren’t held by these institutions – yet have good growth prospects – can be a great way to make money.
A lot of institutions have rules that say they can’t invest in small companies because it’s too speculative (and putting $1 billion into a $100-million firm will push up share prices… high). But once those small companies cross a certain threshold, institutional money pours in.
So, buying into the companies before Blackrock, State Street, Vanguard, or others own them can be a profitable advance in the long term.
CJ is great with these types of plays, too, but we’ll talk about specific small-cap companies in the coming weeks because I think they’ll be some of the biggest beneficiaries of lowered rates in 2024.
