Subject: Re: Barron's ... oops. market not that overpriced
Could it be different this time?

Sure. The super-gigacaps might not be as bad a bet as they were in the past.
But I think the better question, is "how different"?

For example, I wouldn't be particularly surprised to see very largest firms have only half the drag in an average future year (i.e., compared to the average large cap) that they had in the past. That would definitely count as things being different this time, but it still wouldn't suggest them as the smart bet on average in future.

I wouldn't apply any such sanguine attitude to a starting point like today, which seems a bit of an outlier in a few different ways. Fine firms, but US tech stocks currently make up over 19% of the aggregate market cap of all global equities. Is that really the right number? Really?

... and buying Equal-Weight SP which has underperformed regular SP by 35% the last few years

I think the best way to think of it is this way: RSP tracks the set of big companies. SPY is that return, plus or minus in any period a huge random number depending on the current unpredictable stock price results of a very few super-gigacaps. When you appreciate it that way, you realize that extrapolating recent relative results isn't a good idea...the emphasis is on "random number". RSP can be extrapolated a whole lot more than SPY can be, since it doesn't depend so much on the fate of a tiny few firms. It's more of a macro thing.

Jim