Lessons from the Home Office: The Malignant Six

Lessons from the Home Office: The Malignant Six

The Magnificent Seven

We know the movie franchise referred to as The Magnificent Seven. A cinamatic blockbuster, the 1960 American Western was a film directed by John Sturges. The screenplay, credited to William Roberts, is a rewrite of the famous Japanese film, Seven Samurai, which was originally called The Magnificent Seven when it was released in the US in 1954. The ensemble cast of the original US 1960 remake included Yul Beynner, Steve McQueen, Charles Bronson, Robert Vaughn, Brad Dexter, James Coburn, and Horst Buchholz.

The eighth member of the ensemble was Eli Wallach, who plays the leader of a group of marauding bandits. The seven American gunfighters are hired by the Mexican village to protect them from Wallach and his bandits.

In 2023, Bank of America analyst Michael Hartnett coined the phrase “The Magnificent Seven,” when commenting on the seven companies commonly recognized for their market dominance, their technological impact, and their changes to consumer behavior and economic trends. The list included Alphabet (GOOG, GOOGL), Amazon (AMSN, Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), NVIDIA (NVDA) and Tesla (TSLA). Since that time, the struggling Tesla has been replaces by Broadcom (AVGO) to round out the seven.  

The Malignant Six

On the opposite side of the investment platform are the Malignant Six. These are six stocks sitting in my ‘not so sexy’ and frequently tormented portfolio: NovoNordisk (NOVO), Adobe (ADBE), West Pharma (WST), ABSCI Corporation (ABSI), Viking Therapeutics (VKTX), and LVMH Moët Hennessy (LVMHF). All six of these stocks have shed millions of dollars in market value over the past few years. They are dragging down the performance of my portfolio to well below the S&P 500 index, in a time when many peers are finding success, even in the face of Trump tariffs.

What’s Going On?

NOVO: With GLP-1’s taking off, Novo Nordisk has been left in the dust created by Eli Lily.

ADBE: Adobe has fallen drastically behind in the AI race and may be held on the sidelines for years to come.

WST: West Pharma was a winner during Covid, but it has fallen hard on the threats by Robert Kennedy to slash upcoming vaccinations and Covid prevention remedies.

ABSI: ABSCI Corp is an AI company in the pharmaceutical space. It has all the glitz, but none of the sizzle, so this steak is half baked.

VKTX: Viking Therapeutics is another of those GLP-1 warriors, who seem to be losing traction, even in a rising market.

LVMHF: And then there is LVMH, the conglomerate cobbled together by Frenchman, Bernard Arnault, the richest man in Europe. His presige products have fallen dramatically due to the pause in buying by Chinese customers and the threat of tariffs on these luxury goods to anyone who buys them in the States.