Earnings contribution of the top ten stocks in $SPY has collapsed while their % of market capitalization has rocketed past all-time highs. Gonna be a great time for stock pickers as this unwinds . . . again.
Greg S.
1y
Passive flows + buybacks at work
This is interesting
Principal at Shadwell Advisory LLC
1yChristopher Pavese Larger issues than success of stock pickers. Share prices of a few companies are being driven by sentiment and herding of some retail investors (direct and ETF) and share buybacks. Many institutional investors are on the side lines or moving to private markets. Portends poorly for liquidity in the here and now and does not support capital formation for the longer term. Concentration has been episodic and not persisted, so premature to "cry wolf." Stock pickers will have less incoming capital to deploy. Hard to see a potential trigger that reverses this regime.