I’m not making a bullish case for the M7 - honestly, I have no idea whether they’re fairly valued, overvalued, or undervalued.

What I do know is that if one of them drops out of the M7, something else will take its place - just as we’ve seen with past iterations of these market-dominating groups, just as something came and replaced Netflix.

The biggest stocks in the index today look very different from those 50 years ago, yet we haven’t had 50 years of negative returns to get here.

Some of these companies may grow earnings and justify their valuations. Others may not and will decline in value (like Meta/Facebook when it shrunk to being on a PE ratio of 13).

Maybe in the future, Visa, JPMorgan, Bank of America, and Mastercard dominate, and we’ll be debating whether global indices led by the M4 have too much financials exposure.

I broadly agree that multiple expansion has been a major driver of equity performance with specific stocks, and I’ve made that argument myself. If earnings growth continues to outpace expectations, great. If not, valuations may compress, and share prices will suffer.

That said, I’d still expect global equities trading at 18x earnings to outperform, say, Russian or Greek equities at single-digit multiples over my investment timeframe. Valuations matter, but so does long-term structural growth.