11/11/2025
The DeCarley Perspective...7 S&P 500 Stocks are Running Hot, 493 are not.
I don’t recall a time when the concentration risk in the stock market was this extreme. That same sentence could have been typed a year ago, and it really hasn’t mattered yet. I don’t recall a time when the concentration risk in the stock market was this extreme. That same sentence could have been typed a year ago, and it really hasn’t mattered yet. Aside from a temporary blip in early 2025, stock indices have forged unfathomable gains on the backs of a few stocks while most tickers have languished. If the train stays on the track, this isn’t a problem. But if something derails the train, the damage will be catastrophic. This is because prosperity is so concentrated that even investors blindly shoveling money into 401(k)s, with the perception of diversity, are at risk of being bag holders if the Magnificent 7 (Nvidia, Apple, Microsoft, Amazon, Alphabet, Meta, Tesla) reprice to reasonable valuations. In other words, there is an argument to be made that money flows into ETFs…
