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This section of the video discusses the historical performance of big-name companies such as Apple, Amazon, Alphabet, Microsoft, and Tesla, which are currently large allocations in the S&P 500 index. Despite the perception of these companies having a significant impact on the world, research shows that historically, stocks with a lower market value and lower valuation have outperformed those with a higher market value and higher valuation. Companies that have had a large allocation within the index from 1930 onwards have underperformed the market, which indicates that popular stocks should not be overpaid for based solely on their market value and potential future prospects. However, based on research, companies like Apple, Tesla, Microsoft, Amazon, and Alphabet are not expected to perform well in the coming decades due to their high market values and valuations, which can potentially lead to inflationated expectations and disappointment in future results. While this is a forecast and doesn't mean that these companies won't be good investments at a reasonable price, statistically there is a higher chance that they will underperform.
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