Portfolio Investment Strategy To New Sectors Beyond The Weakening Big Tech

Contrarian, Long/Short Equity, Macro, Healthcare

Data analyzing in commodities energy market: the charts and quotes on display. US WTI crude oil price analysis. Stunning price drop for the last 20 years.

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INTRODUCTION

The world is taking a brief breather on the mountaintop to usher in a new era. The important issue is not whether to drive Big Tech even stronger or change its protagonists. Now this time, we must adopt a “Reset” attitude for the future of human civilization. We must remember that new trends have always been led by those who have overcome adversity.

The time spent in the turbulent stock market was truly a panoramic movie. While most sat at desks analyzing data, I was out in the field, writing reports. I fought the stock market with bare hands during the Black Monday crash of 1987. I endured the nightmarish IMF moments of 1997 with my whole body. I still cannot forget the pain of seeing half of my fund’s assets vanish in just three days during the 9/11 attacks in 2001. During the 2008 financial crisis, I also fell into a sense of helplessness as I watched investors collapse.

Now, I wish to share these bitter lessons from the field with my successors. While managing funds for 40 years, I realized one thing for sure: I established a strict rule of believing only what I have seen with my own eyes.

Fund managers, including myself, must always cultivate the ability to accurately discern patterns in the times and economic trends. Our mission is to convey the living reality of the market to investors exactly as it is. That is the only thing I owe the people who trust me with their money.

I have weathered countless turbulent market patterns like those of today over the past 40 years. The market is not collapsing. Rather, a readjustment is taking place. And this readjustment creates investment opportunities that most investors miss.

The Magnificent Seven have been the center of the U.S. economy for the past decade. However, the M7 companies are gradually entering a period of stagnation. Earnings per share (EPS) growth has fallen from 42% to 15% in just one year, and market capitalization has decreased by $2.7 trillion. Only two of the seven companies are leading the way. We are waiting for a new challenge.

In my investment experience, the moment everyone focuses solely on companies with the same direction is precisely when you need to look elsewhere.

Suggestion investment direction

It is clear that we are currently in a chaotic situation due to geopolitical conflicts. In particular, the dispute between the United States and Iran is causing significant uncertainty. However, I have learned not to miss important signals obscured by the noise. In my opinion, the direction of the current situation is very clear.

A large-scale oil blockade would result in the collapse of the global energy chain. In my view, I do not believe it will go that far. What I want to emphasize is not the conflict itself, but the timing of the resolution.

A prolonged US-Iran confrontation is structurally unsustainable.

I have positioned around geopolitical inflection points before. And that pattern remains valid. When the disruption is temporary but the market treats it as permanent, that gap is where returns are made. I believe we are in that gap now.

Investment methodology

1. Sector Selection Framework

My sector selection follows four criteria in priority order.

My screening starts with what I call ‘Street Interest’, I look at socio-economic interest — whether the sector is recognized as a growth point in broader social trends. Once that box is checked, I analyze the relationship between revenue and income growth, whether what a company earns on paper actually shows up in the bottom line. Then, sustainability is the question I spend the most time on investment — whether growth is structural or one-time. Finally, the issue of cross-sector convergence is an important aspect that can provide alternative opportunities in medium-to-long-term investment.

2. A selective research process

Investment decisions must always be made on their own and require consistent procedures

-Three-Year Review of Revenue and Revenue Growth Trends

I have experienced failure based on just one year’s worth of performance data. You need to look at least three years’ worth of data to see the direction of an investment.

-Routine Indicator Analysis (ROA, ROI, ROE, P/E, Operating margin)

It taught me that companies with high operating profit margins can survive even amidst a financial crisis.

-Positioning within the same industry (summary of relative competitive advantage)

I held in my hands the fact that investments in companies that secured a competitive advantage through on-site investigations generated returns even during the pandemic.

-Validation of policy sensitivity and social flow disparity (diagnosis of responses to government regulations and policies; ex, interest rates, taxes)

I believe that during the IMF crisis, politically and socially biased companies collapsed in an instant. Opportunistic companies that chase only policies should be excluded from investment targets.

3. Portfolio composition and distribution ratio

The portfolio composition and distribution ratio will reflect my current conviction

-30% of large retail retail businesses (stable mid- to long-term investment)

-25% Healthcare (Challenging Innovation Investment)

-25% of energy infrastructure (investment reflecting current economic trends)

-10% of pet industry management (medium-term investment reflecting social trends)

-10% of big tech-related areas, including M7 (administrative investment)

As the growth of the so-called ‘Big 7’ companies — Apple, Microsoft, Google, Amazon, Meta, Tesla, and NVIDIA — is gradually slowing, there is a need to reduce investment in Big Tech companies. The issue is not whether Big Tech is broken. The issue is concentration. And concentration at this level always, eventually, corrects

-Bloomberg: Magnificent 7’s Stock Market Dominance Shows Signs of Cracking (1/11/26)-Fortune: The Magnificent 7 isn’t that magnificent: 5 of the stocks have underperformed the market this year (12/15/2025)-The Wall Street: Forget the Magnificent 7, it’s now the Magnificent 2 (1/2/2026) Staying overweight Big Tech through this rotation is the wrong move. Areas that were temporarily overshadowed are now rekindling growth. I have witnessed such cycles countless times in the investment field over the past 40 years. What looks like a sector rotation is actually something deeper — a shift in where earnings power lives. It is investors who move preemptively, rather than reactively, who seize these opportunities.

Investment strategies for each individual sector

The first sector I am focusing on is Large Retail

When COVID19 hit the world, all member of the earth stopped their life activity. Naturally production, distribution, selling, purchasing are halted. Now here is a center of life gravity what I have to remember. Humans cannot live without food for a week. Whatever else shut down, people still needed to buy, to consume, to eat. Retail cannot vanish, will exist with human-being permanently.

Due to human don’t be activing, it seemed that retail get a vigor temporarily at that time. That is new flow for survival. On characteristic of retail industry, operating profit margin is low. But continuous growth will be sustained regardless of expansion of economy.

Retail Business always take charge of middleman role in the human society. Ultimately the world cultivate retail industry with loving care. Also we pay attention this area and invest retail sector aggressively.

The pandemic accelerated e-commerce dramatically. In 2020, e-commerce sales rose 43% to $815.4 billion, up from $571.2 billion in 2019, according to the U.S. Census Bureau. By the end of the pandemic period, total e-commerce sales had grown approximately 50% to reach $870 billion.

The structural case for retail investment rests on two foundations. As long as overall income grows, retail — the primary consumption category — continues expanding modestly. And as product diversification increases consumer satisfaction, preference for large-format retailers with broad assortments strengthens further.

From an investment strategy perspective, I’ll be honest — this part isn’t where you go hunting for dramatic profit growth numbers. The broader market averages 13.1% in operating margin, while large retail runs at roughly 4.4% — structurally low-margin, but not in structural decline. A long-term investment approach is the appropriate response to this profile. Investment attractiveness will gradually increase over the mid-to-long term. While the growing interest in omnichannel transition is still in its early stages, funding will soon follow. (CSIMarket, S&P 500 Operating Margin 2025), (Deloitte, Global Retail Outlook)

The company I am watching most closely in this space is Costco. With revenue of $270 billion, an annual growth rate of approximately 8%, and net income of approximately $8 billion (Costco Investor Relations, FY2025), the numbers are solid. But what makes Costco genuinely hard to copy is the structure itself.

Low-margin merchandise sales run alongside a high-margin membership fee business, creating a revenue architecture that is structurally insulated from typical retail margin pressure. Price discipline, membership loyalty, and global purchasing power combine to make Costco a mid- to long-term compounder. Its competitive positioning against Walmart rests on a fundamentally different service philosophy and an independent minimum-margin strategy that prioritizes member value over short-term revenue maximization.

My buy range for Costco is approximately $950 per share, with a target near $1,500 and a suggested holding period of one year.

[SA Quant Perspective]

According to the SA Factor rating as of Apr. 6, 2026, Costco has maintained a consistent “A+” in the profitability factor for more than six months. Its valuation and growth ratings are below expectations at “F,” reflecting the premium the market assigns to Costco’s structural durability. Rather than chasing rapid growth expectations, the investment thesis here centers on the structural strength of the membership-based model — a durable competitive advantage that standard valuation screens tend to undervalue.

The second sector I am focusing on is Healthcare

Desire of human is living longer and living healthier. The medical advancement has been answering this problem. The United States sits at the front of medical healthcare parts. Many of the world nation efforts to follow U.S.

At this point, I have a meaningful question. Why the best medical system is not reaching enough to people. Medical cost is the massive barrier. What majority of Americans cannot use the medical system is because only the money.

Now all problem is exposed obviously. Healthcare service needs to be reimagined at lower cost than it currently does. That is a investment opportunity where I see. Already that direction market is opening and capital is following.

According to The Commonwealth Fund, per capita medical cost in the U.S. runs approximately $14,885, two to three times the OECD average. The primary driver of this gap is treatment abandonment: a significant portion of Americans forgo care because they cannot afford it. It is an underserved one — and underserved systems don’t stay that way forever.

I’m not calling this an innovation play, even though innovation is very much happening inside it.

This is fundamentally a structural expansion story. The dual medical structure — high cost for those who can access care, no care for those who cannot — creates persistent, compounding demand. Healthcare spending expands regardless of economic cycle, which is precisely why this sector deserves bold allocation.

The company I am watching in this sector is Eli Lilly. With revenue of $45 billion in 2024, annualized growth of approximately 8%, and net income of approximately $8 billion (Eli Lilly Investor Relations, FY2024), Lilly has established itself as the world’s most valuable pure-play pharmaceutical company by market capitalization (Bloomberg, March 2026). Its dominance in the global obesity treatment market — the primary growth axis of the business — is not a trend position. It is a structural leadership position in a category that is expanding faster than any other in pharmaceutical history. Risks I’m watching include the possibility of obesity drug valuation compression, government price control intervention, and intensifying competition from Novo Nordisk.

[SA Quant Perspective]

According to the SA Factor evaluation as of Apr. 6, 2026, Eli Lilly received an outstanding “A+” rating on both growth and profitability factors on a consistent basis over six months. Valuation remains at “F,” reflecting overvaluation relative to traditional metrics — a premium the market is assigning to the obesity treatment franchise’s growth trajectory. Explosive market demand validates my view that healthcare is not merely a defensive sector. It is a sector of aggressive structural innovation investment, and Lilly’s Quant profile is consistent with that thesis.

The third sector I am focusing on is Energy Infrastructure

Every progress stage of human history has been succeeded with energy. This contents are facts which do not deny. Crude Oil that the best important natural resource energy is running to empty. The secure shift for renewable energy and the development of new energy source is inevitable human’s fortune. We cannot return to the dark age with being forgiving energy.

All of the world people must immerse to energy interest in order to survival. The present problem is that Energy is limited. We must recognize this energy problem and we all can solve clearly. Energy system must be managed with among the countries over the world.

I suggest urgent problem one. The Criticality of electricity management as energy is redefined in our life. Electricity energy flow will be connected to the future forever. But at this present, Electricity network become deterioration, electricity demand is accelerating. That is why my focus with in the transformers.

U.S. energy investment in 2024 reached approximately $1.9 trillion, according to the International Energy Agency. The directional shift — away from traditional hydrocarbon infrastructure and toward the electric grid — is structural and accelerating.

My investment positioning in this sector reflects that transition. Interest in legacy energy infrastructure is being reduced in favor of concentrated exposure to the power sector. The reason is straightforward: AI infrastructure is driving power demand to levels that no existing grid was designed to handle. Even if this surge proves partially cyclical, power demand from AI data centers will scale aggressively through the remainder of this decade. The transformer sector — the critical enabling infrastructure for grid expansion — is the most prioritized investment within this space. AI data center power demand is expected to reach all-time highs in 2026, according to the U.S. Energy Information Administration and the International Energy Agency.

The company I am watching in this sector is NextEra Energy. With revenue of $28.1 billion in 2023 and net income of approximately $6.9 billion in 2024, NextEra operates with a margin of approximately 28% — substantially above the utility sector average. It is the largest U.S. power utility and renewable energy company, operating across two investment tracks totaling approximately $24.7 billion in active deployment (Visual Capitalist). NextEra is investing heavily in wind and solar capacity, and based on EPS projections, it is expected to deliver annual average growth of more than 8% between 2025 and 2030 (Fintool).

[SA Quant Perspective]

According to the SA Quant assessment as of Apr. 6, 2026, NextEra Energy carries a partially strong “A-” in profitability. Valuation at “D” and Growth at “C” reflect near-term economic sensitivity and the capital-intensive nature of grid expansion. There is ample room for improvement as the AI power demand story plays out structurally. SA data supports my view that NextEra’s role in power grid and transformer infrastructure represents a critical investment point during this energy transition — one that standard valuation screens are still underpricing.

The fourth sector I am focusing on is Pet Care Industry

Pet industry already has sit around for a long time. Yet, activating is not seen for the world. Only companion consciousness of our mind come to reach maturity. This mind is speeding up growth potential. Pet display stand in large retail mart opened long time ago and mass media launched pet program at regulation time. Now pet industry’s prime task is animal medicine. Like human situation, we know that animal medical service is lack of unreasonably too.

Pet industry is not any more demonstration industry. According to one does not feel lonely when he is with pets, I can inform confidently that pet industry speed up.This industry is no longer selective, is becoming essencial. Investment for pet industry can be interpreted broadly humanism business beyond the animal business.

Nobody pitches pet care at investment conferences. That’s part of why I’m here. As of 2023, the market size stands at approximately $147 billion, according to the American Pet Products Association and Bloomberg Intelligence. The growth trajectory over the past five years has been consistent and significant: $90 billion in 2018, $103 billion in 2020, $136 billion in 2022, and $147 billion in 2023, roughly 60% total growth over five years. That kind of sustained trajectory doesn’t reverse quietly (APPA, National Pet Owners Survey).

Approximately 134.8 million U.S. households — roughly 66% of all households — live with at least one pet. The estimated pet population includes approximately 89 million dogs and 94 million cats (American Pet Products Association). The market breaks into four segments: pet food at approximately 40%, veterinary care at approximately 30%, supplies and accessories at approximately 20%, and services such as boarding and grooming at approximately 10% (APPA). This ‘small’ slice is the clearest evidence of the pet-humanization trend I’ve been tracking. Growth drivers include the sustained increase in remote work, rising pet adoption rates, and growing demand for emotional companionship — trends that accelerated during the pandemic and have not reversed (American Society for the Prevention of Cruelty to Animals).

The investment case within pet care centers specifically on the pet healthcare market, which I regard as the fastest-growing segment within this already-expanding industry. The animal healthcare market is projected to reach $237.8 billion in 2026 and $399.4 billion by 2035, according to Global Market Insights. Within pet healthcare, the market breaks into three subsegments: veterinary care services, the animal pharmaceutical market, and integrated healthcare combining services, drugs, and diagnostics. My investment focus is concentrated on the animal pharmaceutical segment, which is growing fastest and commands the highest structural margins.

The company I am watching in this sector is Zoetis. With revenue of $9.3 billion, organic revenue growth of approximately 6%, and net income of approximately $2.7 billion on an adjusted basis (Zoetis Investor Relations, Full Year 2024 Results, February 13, 2025), Zoetis is the world’s number one pet healthcare company by revenue (Zoetis Corporate Profile, 2025). With an adjusted net margin of approximately 29%, Zoetis ranks among the highest in the sector for investment value and return quality (Zoetis Full Year 2024 Earnings Release). It is a company with excellent investment value that has established the kind of sales leverage that positions it as the Pfizer of pet healthcare.

[SA Quant Perspective]

As of Apr. 6, 2026, Zoetis carries an outstanding “A+” in profitability, evidence of its dominant market position with results sustaining this level for over six months. Valuation is rated “D” and Growth remains under pressure at “D-”, reflecting the high-quality premium the market requires from a leading pet healthcare company and near-term headwinds in companion animal spending. SA Quant data supports my argument that Zoetis is not simply a consumer-interest company. It is a high-margin pharmaceutical business that fits squarely within the structural “pet humanism” consumption trend — and one that the current valuation offers a rare entry point into.

Consideration of macroeconomic conditions linked to investment

My view is that the global economy is moving in a direction that cannot be reversed. Naturally, investment seems more advantageous to approach the Call concept than the Put concept. Of course, there may be investment flows that change some of the intermediate positions, but this is a temporary response.

In light of my 40-year experience, it is diagnosed that investment management in the future will have a better return on somewhat aggressive tendencies.

-Interest rates, which are most sensitive to investment, are expected to show a trend of cuts.

-Inflation is always a factor that jeopardizes investment, but the trend of stagnation seems likely.

-Some of the U.S. government policies seem radical, but they are expected to gradually move toward protecting investment.

Subjective arrangement of investment risk factors

It is a well-known fact that the structure of investment itself is an execution in which you have to take some risks.

Our goal is to reduce this risk factor to a minimum and earn a profit.

Given U.S.-Iran tensions, this strategy carries elevated volatility — target return expectations should be adjusted accordingly.

Under the current investment environment, areas where investment is concentrated should be excluded in principle

We should not create a situation in which we are misled by comparative analysis investment data that entices investment.

If the investment target return is estimated to be less than 20%, take a step back from the investment

-Big Distribution Retail: Get the network up and running that always tracks margins

-Healthcare, Healthcare: Investing in response to fluctuations in consumers’ income and assets

-Energy Infrastructure: There are many areas linked to government policy, so you should always keep an eye on them

-Pet Care Industry: Monitor shifts in social consumption trends directly.

Actionable Takeaways

1.Portfolio restructuring (Active Sector Rotation Response)

Reduce Big Tech, semiconductor, and AI exposure: retain only core positions, given decelerating growth and valuation risk.

2.Increasing the proportion of healthcare, energy, and consumer goods:

Move capital to sectors that can ensure long-term growth and stability at the same time.

3.Specific execution:

Reallocate from 20% IT toward 30% healthcare, 20% energy, and 30% consumer goods.

4.Selecting Structural Growth Theme

-Consumer goods and distribution:

-Online and offline convergence platforms,

-Healthcare: Digital Health,

-Energy: grid-scale transformer infrastructure,

-Pet Industry: ZOETIS

5.Concrete execution

Invest in structural growth themes using ETF and sector funds aligned with the allocation framework above.

6. Take a break

Sector, which attracts institutional investors and ordinary people intensively, needs to take a tentative wait-and-see attitude (NVIDIA, Oracle, Intel, Broadcom)

Disclosure: The author has no positions in any stocks mentioned and has no plans to initiate any positions within the next 72 hours. The author wrote this article independently and expresses their own opinions. Past performance is not indicative of future results.

“This article represents the author’s analytical perspective and does not constitute personalized investment advice”

Disclosure: I have no stock, option, or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

About the Author

SHI-YONG SUH (서시영) Professor · Economist · Innovation Columnist Creator of Suevivalogy™ & Immersion Flow™

Professor Suh Shi-young is an economist, fund manager, and innovation columnist with 40 years of frontline experience in global financial markets. He is the pioneer of Suevivalogy™ (a survival-based economic framework) and Immersion Flow™ (a five-part operational system for organizations navigating structural uncertainty).

He is the author of the global ebook “Eat Sales Raw” (2025, ASIN: B0FG6MMHMD) and actively contributes deep-dive macro insights across top-tier global platforms including Harvard Business Review (HBR.org), Seeking Alpha, Medium (DataDrivenInvestor), and Substack.

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