The "Magnificent Seven" stocks -- Apple, Microsoft, Amazon, , Meta Platforms, Nvidia, and Tesla -- all crushed the performance of the S 500 in 2023. But as we have seen time and time again for several years now, themes that play out in one year don't necessarily continue to dominate the following year.

Market leaders and market laggards can trade places in an instant. Over the long term, the best companies usually win. And that's why the Magnificent Seven stocks could still be worth owning, or even buying now. Still, the valuations of these beloved stocks are far higher than they were a year ago, making it harder to sustain the blistering outperformance.

One of my favorite Warren Buffett quotes is that "you pay a very high price in the stock market for a cheery consensus." Put another way, red-hot stocks adored on Wall Street are usually expensive. Meanwhile, a company undergoing challenges that is out of favor is usually cheap, even if the long-term investment thesis is solid.

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Source Fool.com