1/7) *Ecommerce, online payments, software*

IMHO, these are modern-day utilities; consumers and companies *need* them to get by. Due to network effects and/or stickiness, these businesses are quite 'moaty' and their customers use their services regularly; through good and....

2/7)...bad times.

By and large, these businesses offer 'mission critical' services; so their cash flows are pretty predictable and consistent.

Whether the economy is good or bad, who doesn't order online, make payments online or use software? ...

3/7) The ecommerce, online payments and software markets are enormous - very big TAMs (AWS/AMZN, GCP, Azure, Alibaba, Mercabolibre, Sea, Shopify are still growing rapidly).

Many of the businesses in these industries have very high gross margins and their revenues are likely to..

4/7)...grow for years!

Furthermore, their customers' usage is still increasing i.e. they are spending more and more each year.

Last but not least, in many cases their Founders are still running the show and they have skin in the game....

5/7) Now, compare these with other industries such as energy, materials, industrials, restaurants, hotels which are all quite cyclical with lumpy/uncertain revenues and cash flows (and very little growth and/or switching costs).

Given these attributes, is it any surprise that..

6/7)... ecommerce, online payments and software stocks are trading at much higher valuations than the other industries?

Of course they are richly valued!

Yes, the valuations are currently historically over-stretched but if these companies continue to execute, they should..

7/7)...grow into their valuations over time.

Hope this explains why I've still concentrated my portfolio in these richly valued businesses.

Periodic pullbacks and consolidations notwithstanding, IMHO these stocks should continue to deliver a satisfactory return.

THE END.