No. of Recommendations: 14
Interesting market note from Ned Davis Research. (I can't afford a subscription, but since I had a free trial once, they send me stuff from time to time)
They note that the Technology sector now represents 30.6% of the market cap weight of the S&P 500 now (highest since 2000). From 2002-2019 the fraction mostly hovered pretty consistently around 15.5%-16%, give or take a percent, so it has basically doubled from what was normal for a long time.
But profits from that sector are only 20.5% of the total. A gap is normal, but not normally that big: this is about the biggest gap since 2004. They suggest not being overweight "tech". Not a short call.
I suspect they are using the S&P sector definition, not a magnificent seven sort of list, but they dominate it so fully that maybe the distinction is moot.
Jim
No. of Recommendations: 1
They note that the Technology sector now represents 30.6% of the market cap weight of the S&P 500 now (highest since 2000). From 2002-2019 the fraction mostly hovered pretty consistently around 15.5%-16%, give or take a percent, so it has basically doubled from what was normal for a long time.
I wonder how much of the cap weight preponderance is owing to the advent of AI, a technology that inspires fearful anticipation in the 99.9...9% who aren't attempting to financially exploit it.
Unq
No. of Recommendations: 1
They note that the Technology sector now represents 30.6% of the market cap weight of the S&P 500 now (highest since 2000). From 2002-2019 the fraction mostly hovered pretty consistently around 15.5%-16%, give or take a percent, so it has basically doubled from what was normal for a long time.
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I wonder how much of the cap weight preponderance is owing to the advent of AI, a technology that inspires fearful anticipation in the 99.9...9% who aren't attempting to financially exploit it.
UnqMy quick guess is half. People are positioning themselves early for what they think will be massive.
There is always the chance that AI progress will stall or that momentum will turn.
This guy pretty well states the AI optimists view in seven minutes:
https://www.youtube.com/watch?v=bfsjJv_2XBwSorry for the Tesla references.
