No. of Recommendations: 23
Isn't the s&p and qqq up prob YTD just because of Nvidia, Alphabet and Amazon?
To an extent. Size alone has not been an advantage. Perhaps surprisingly, the S&P 500 and the S&P 500 Equal Weight are up identical amounts year to date. The largest firms have not been outperformers.
But tech-leaning firms as typified by Nasdaq listings have done better than the rest, and huge tech-leaning firms have done better than merely very large ones.
Year to date price-only return
RSP 5.3% (S&P 500 Equal Weight)
SPY 5.3% (S&P 500 float adjusted cap weight)
QQQE 7.7% (Nasdaq 100 Equal Weight)
QQQ 9.5% (Nasdaq 100 broken cap weight)
To a first level, you hear a lot of talk about the irrational exuberance going on.
To a second level, that is rebutted by the observation that forward earnings estimates have actually risen more than the market has: forward P/E ratios have dropped, not risen.
I lean towards a different line of thinking: it's mostly exuberance, but it's showing up in the unrealistic earnings forecasts.
Large swathes of the world economy are headed for a world of hurt over the next 18 months even if there is a sudden outbreak of peace everywhere. Which there won't be. Few companies anywhere will be unaffected.
Jim
(all loans paid, and the remainder 70% cash)
