 Good day fellow investors. Now the SAP and the top SAP 500 companies continue to go higher, higher, higher and higher. And what I want to do is to look at are they going higher because they are really strong companies with low risk or as the prices go higher the risk is higher. In order to do that I'll analyze top 10 SAP 500 holdings now 2010, 2019, 90 and 1980 and see how those companies performed in relation to the SAP 500. So see if you're a top company everybody thinks very well about you and I want to see how that changes in the future, does it change or you are at the top forever. So what are the risks and rewards for investing in the top SAP 500 companies the Amazon's, the Apple's, the Facebook's, Microsoft's and other companies. So let's immediately start. The top five holdings account for 11.74 of the index. So the other 495 companies account for 88.226. So that's a very strong imbalance but that's how the SAP 500 is formed. The weightings are based on market capitalization. The bigger the market cap, the bigger the weighting and the bigger are the purchases from ETFs. So let's immediately see what did the SAP 500 top 10 look like in the 1980s. IBM was the biggest company AT&T, Exxon, not yet merged with Mobile, Standard Oil of Indiana, Schoenberger and other oil companies with General Electric in 10th place. What I did, I looked at the performance of the top five companies since 1980 and we can see here that all companies except for Exxon that performed at par underperformed significantly the SAP 500. So they underperformed for from a position of strength. Going on to the 1990s, the first thing to note is that only four companies that were in the top 10 in the 1980s are still in the top 10 in the 1990s. So six out of the previous top 10 went out. From a performance perspective I had to exclude Philip Morris because it spint off Philip Morris International so four companies remain to check. And again, if you look at the chart, all companies underperformed the SAP 500 in the long run. Very interesting to see how that performance evolves during time. Let's go to the year 2000. Again, only four companies from the top 10 of 1990 is now in the top 10 of the 2000s. And you can see that IBM is gone from the top. It's not even in the top 10. Let's compare the performance up to now and we have finally a company that has outperformed the SAP 500 in the last 17 years. However, the other four companies of the top five have seen fairly underperformed. And you can see Citigroup is down 82%. General Electric is down 49% in 17 years. So note that and Cisco is down 41%. So only Exxon performed positively in the last 17 years. So again shows how the strength that the investing community perceives those companies gives to those companies is not that strong in the long term as we might see it now. If we look at 2010, again, only four out of the top 10 in 2000 remained in the top 10. We have completely new companies in the top 10. If we look at performance, we finally have three outperforming. Apple went up 416% since 2010. Berkshire went up 167% Microsoft 132%. But that's just seven years. We still don't know how those companies will perform in the next 10, 20 years. Exxon Mobile is now up only 16% while General Electric is up 65%. If I compare the SAP 500 top 10 of 2010 and now only five companies are left. So those companies are big, have high market capitalizations, but that changes very soon. If you think about a decade is soon. So let's analyze now the top five companies that are now at the top of the SAP 500 and see their strengths and see their risks. So Apple is the top company, the largest company. It's very, very profitable. Apple iPhones, all those things that Apple sells, loyal customer base. But let me show you the top company of the 1990s. The top company was IBM and it had a huge market share, huge potential dominance, was completely dominant. What happened? Well, if you're dominant, everybody is after you and sooner or later somebody else disrupts the environment and catches you on the wrong foot. So you can see how even if Apple is so strong now, there are always risks, risks that we don't see coming ahead. Second company is Microsoft, has become the standard for the software we use if you don't have a Mac, but the growth hasn't really been stellar in the past few years. It needs to reinvent itself to grow and something very difficult will all the competition and technology disruptions going on. Amazon, Amazon's biggest challenge are margins. Every retailer is investing heavily into the online commerce and it's extremely difficult to be profitable. The latest earnings myths show that Amazon needs higher capex just to keep up of staying ahead and the future profitability is questionable. It looks strong, it looks powerful, but everybody is after Amazon. So when it will become profitable, when it will become stable, probably never. So that's a very important risk for Amazon. As for Facebook, let me just give you a list of past market dominators. America online, Yahoo, Exide, Netscape, GeoCities, Alta Vista. How many of those still exist? Zero, nada. So very important to see how dominance can be perceived as powerful dominant, but not for the long term. Again, I'm just showing the risk. I'm not saying that Facebook will go bust tomorrow. I'm just showing the risk for your portfolio positioning. Again, Johnson & Johnson hasn't really seen much growth in the last 10 years and revenue growth is less than 2% per year. So to conclude, the problem is that we can see the risks that are out there. Usually unforeseen risks impact large companies very, very quickly. So things deteriorate because we always plot the past into the future. However, the future is always different. So that's a risk inherent to every company inherent to investing. So you have to be careful about that. What happens is that the business model shows flaws. It's not as profitable as expected. Think Amazon and competition. Competition intensifies. Everybody's after the dollar. And what you can do is perhaps do what Peter Lynch did. He didn't like the hottest companies. He didn't like the hottest sectors. He liked the boring sectors that nobody was looking at and then was looking at the best company in that boring sector. So he made a lot of money. So very interesting, different perspective. So I'm not saying that the S&P 500 will drop or that the companies won't be dominating for the next five, 10 years. I'm just pointing out to the risks. And it's very healthy for an investor to think about the risks of what's going on. Thank you for watching. Leave your comments below. Like if you like the content. And I'll see you in the next video.