When investors first started talking about the 'Magnificent 7' tech stocks as a homogenous group, it came as something of a surprise that the stocks were already in my own personal investing portfolio.
Over the years, I have accumulated stakes in almost all of these companies. Soon after Warren Buffett began buying up large chunks of Apple Inc (NASDAQ: AAPL) back in 2016, I decided that it made sense to have some as well.
The attraction to Microsoft Corporation (NASDAQ: MSFT) was also too hard to pass on, given that the US tech giant functions as an exchange-traded fund (ETF) of technology and e-sports.
Similarly, when Amazon.com Inc (NASDAQ: AMZN) stock took a big hit in 2022, I decided it was too good an opportunity to wave past, given Amazon is the most successful e-commerce company in the world.
It was a similar story with Google-owner Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL). After all, how many companies command a near-monopoly over their primary market (search in this case)? Throw in YouTube, Cloud, and the rest of Alphabet's 'other bets', and you've got something special.
When I first bought shares of electric battery and vehicle manufacturer Tesla Inc (NASDAQ: TSLA) in 2019, it was a small, speculative investment. I didn't know at the time that it would be one of my best decisions ever.
I've long been conflicted over the impact of Meta Platforms Inc (NASDAQ: META)'s products on society. However, as I've written about before, successful investors need to put their money into what people are buying (or looking at), not what they want them to be buying. Meta's continued domination of our eyeballs was too hard to ignore, so it also found its way into my portfolio.
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Six out of the Magnificent 7 ain't bad?
You might notice there's one Magnificent 7 company that I haven't mentioned yet. It's none other than Nvidia Corporation (NASDAQ: NVDA).
Nvidia is in last place because, unfortunately, it remains the one Magnificent 7 stock that has never graced my portfolio.
I say 'unfortunately' because Nvidia has been one of the best-performing stocks you can find in recent years. It was only back in late 2022 that this stock was trading at just over US$11 a share (stock-split adjusted). Today, those same shares are worth US$145.48 each, up a whopping 1,200% from that low.
If I had bought shares back then and held them to today, it would have been life-changing. Chances are you wouldn't even be reading this, as I might otherwise be passing time in a bungalow in the Bahamas. But alas, I did not, and here I am.
Of course, I wish I had bought Nvidia. But at the same time, I don't begrudge myself for not pulling the trigger.
Why didn't I buy Nvidia stock?
The reason is simple: Nvidia is not a business I know well or have the capacity to gain a deep understanding of.
When it comes to Apple, Microsoft, and any of the other Magnificent 7 stocks, I feel I have a competent understanding of how each business makes its money, the intrinsic competitive advantages it enjoys, and the threats it faces in the future.
I can't say the same for Nvidia, though.
Nvidia specialises in the design and production of graphics chips, cards, software, and programming interfaces. It is also a leading supplier of artificial intelligence hardware and software.
These are deeply complex products and are beyond my circle of competence as an investor. I don't have the ability to understand this industry in depth, and as such, have no way to build an investing thesis for Nvidia. Because of this, I have never seriously considered buying this company, even as it continued to soar to new stratospheric heights.
That decision has cost me. But I would rather sit on the sidelines and watch its success than buy shares in the blind hope they would continue to rise. Buying Nvidia would have been a straight gamble, as I didn't (and don't) know what its future might hold. That's not something I like to do when it comes to investing.
