Point taken but I think it's a bit of a fallacy to frame this way. The market can go up and down as can individual stocks; "85% of the decline" doesn't make sense because some stocks are going up.<p>A book I read a few years ago put this more eloquently. Some governor said that 20,000 jobs were created last month and his state contributed half of them. Well, many states lost jobs and the state next door actually gained MORE jobs, so the "more than half" framing makes no sense
I wouldn't say it's a fallacy. It's just an interesting way to look at the data.<p>I think more people need to be talking about the fact that the S&P 500 has extreme concentration risks that didn't exist 15+ years ago (and the Chart of the Day demonstrates that). We're in uncharted territories re: market cap concentration.
It becomes less interesting the more the “overweight” stocks correct.<p>The extreme concentration risk lessens as these 8 stocks fall in value compared to the rest.<p>I also don’t personally see the risk in the concentration. Risk of what? These companies are legitimately larger and doing more business than other firms.<p>Pick a median consumer. Which company are they sending more profit to than companies like Apple or Amazon?<p>10 years ago the average consumer maybe bought an iPhone from Apple every 3 years, so they gave Apple less than $100 of pure profit dollars per year.<p>Now that same consumer is giving Apple money for the iPhone, but also spending on services that they weren’t buying 10 years ago. If they’ve got an Apple One subscription they’re now sending Apple double or triple the profit they used to get.<p>These companies are big because they sell more things and are more diversified than they were in the past.<p>There’s no concentration risk. I’d actually argue that the concentration risk can be resolved overnight through antitrust regulation (e.g., force Apple and Amazon to split into multiple companies, as they already have obvious verticals that could stand alone).
I think the point was that those stocks are causing the S&P to be overweight towards those firms that are highly invested in AI. It's like comparing personal wealth when Warren Buffet and Bill Gates are included in the list - the average ends up far above the median.
Yes.<p>Citations:<p><i>Apollo Academy: S&P 500 Concentration Approaching 50%</i> - <a href="https://www.apolloacademy.com/sp-500-concentration-approaching-50/" rel="nofollow">https://www.apolloacademy.com/sp-500-concentration-approachi...</a> - March 14th, 2026<p>> The 10 biggest companies in the S&P 500 make up almost 40% of the index, and if Anthropic, OpenAI and SpaceX are added later this year, the concentration could approach 50%, see chart below. The bottom line is that the S&P 500 basically doesn’t offer much diversification anymore.<p><i>Apollo Academy: Extreme AI Concentration in the S&P 500</i> - <a href="https://www.apolloacademy.com/extreme-ai-concentration-in-the-sp-500/" rel="nofollow">https://www.apolloacademy.com/extreme-ai-concentration-in-th...</a> - January 13th, 2026<p>> The bottom line is that investors in the S&P 500 remain overexposed to AI.<p>TLDR Concentration risk <a href="https://www.finra.org/investors/insights/concentration-risk" rel="nofollow">https://www.finra.org/investors/insights/concentration-risk</a><p>(not investing advice)
A similar explanatory mirage happens in elections: when a candidate loses by (say) 1% of the vote, people go looking for factors that produced a 1% swing and declare, “it’s because of inflation! it’s because they took position X! it’s because the other team focused harder on turnout!”. You can find several such explanations and no single one is <i>the</i> causal one.
> The market can go up and down as can individual stocks<p>Literally the main reason we even have indexes.<p>> "85% of the decline" doesn't make sense<p>85% of the decline represented by the overall index.<p>> so the "more than half" framing makes no sense<p>It makes perfect sense. It's just misleading.
FYI: Larry Ellison's net worth is down $200 billion since September. (Hateful Eight = Mag 7 + Oracle).<p><a href="https://www.thebignewsletter.com/p/monopoly-round-up-the-iran-war-price" rel="nofollow">https://www.thebignewsletter.com/p/monopoly-round-up-the-ira...</a>
Do people really care that much about short term decline? The SP500 was around 5000 a year ago, and it's currently well over 6000.
It depends. People can always say, "zoom out," but that only works if you plan to be long term invested. Really it's more of a, what is your investment horizon/window. If you were planning to reap what you sowed in the stock market right now, you'd maybe be screwed. But like myself, the money I put in (personal account), Im not looking to touch for at least 10 years. Although right now/near term, it's not clear if we will be going up anytime soon. We were already stalling for the better part of the last 6-7 months on growth. Now we are going down with potential macro events that may keep it going down or stall growth for a bit. But as I said, if you're putting in money today planning not to touch it in 10-20 years, don't sweat it. Until the recent events in the Middle East, my international ETF was out performing the S&P500 by quite a bit.
Yes. Nobody looks at the long term anymore.
If society could think past next quarter, we arguably wouldn't be in this mess to begin with.
It's been interesting to review my portfolio, such as it is, against this situation, and see that I'm down relatively little. Not because I've bet <i>against</i> anything per se, but I made a conscious decision years ago to diversify out of the SP500 ("VTSAX and chill!") into broader and exUS indices.
The broader US market is only about 25% bigger than the S&P500, FWIW. (Or put another way, S&P500 is about 80% of all US equity.) They also trade in almost lockstep:<p><a href="https://totalrealreturns.com/n/VFIAX,VEXAX?start=2025-01-01" rel="nofollow">https://totalrealreturns.com/n/VFIAX,VEXAX?start=2025-01-01</a>
Aren't most exUS stocks dominated by the US economy?<p>Getting mostly out of hateful 8 hype isn't bad though when they're going down...<p><a href="https://investor.vanguard.com/investment-products/etfs/profile/veu" rel="nofollow">https://investor.vanguard.com/investment-products/etfs/profi...</a>
We might have to come up with a new name for the top stocks if SpaceX and Anthropic IPO this year. I noted that Musk might be getting ahead of any IPO fatigue that might be caused by the big 2 AI companies. Will OpenAI somehow stealth their way into a listing before those two?<p>Also some of the recent declines will be due to the war.
It's totally crazy that Tesla gets included with real companies. It's a meme stock with a 323.88 price to earnings ratio. It has no business being in the S&P 500 and should quite frankly be delisted.
Elon is working on a scam to get SpaceX into the S&P after its IPO in violation of current rules:<p><a href="https://www.ft.com/content/59adbe42-ca30-47f3-9cda-5415945e9368" rel="nofollow">https://www.ft.com/content/59adbe42-ca30-47f3-9cda-5415945e9...</a>
Markets can stay irrational longer than you can stay solvent. There are still plenty of people who still take everything Elon says as the truth in 2026. I know people who are otherwise very reasonable, immediately get defensive when presented with the mildest of the criticisms of Elon.
Yeah, I don't understand Elon's plot armor, especially after the calling a cave diver a pedo. That's when I definitively stopped liking him, though I always thought that the Hyperloop seemed pretty dumb.<p>I am not the first person to say this, but I guess I took a lot of what he said at face value because I don't really know anything about physics or rockets beyond a high school level. Then he started saying stuff about computers that were "slightly off" at best, and since I know a lot more about computers it made me realize he was kind of full of shit.
Worse yet, he doesn't seem to realize when he's full of shit. He's very confidently wrong. It makes me so curious to understand what his competencies actually are. Clearly he's not an idiot; he's got to be great at some things. I just can't tell what it would be anymore.
Sinclair's quote rings especially true here. Threatens a person's money, no matter how irrational, and you'll get the most disciplined thinkers devolve into 4chan level tirades.
I like to believe that this was the actual reason to acquire Twitter: it’s the meme engine that keeps Tesla/SpaceX valuation high.
It is a crazy meme stock, but in terms of the S&P500, it's 2000x the size of the smallest S&P500 component.
just look how s&p 500 is defined. your answer is right there. there is no “does cramsession approve” proviso in there.
Short it if you think it’s overvalued
Shorting requires both being right <i>and</i> good timing on when everyone else figures out you're right.<p>Famously: <a href="https://en.wikipedia.org/wiki/Michael_Burry" rel="nofollow">https://en.wikipedia.org/wiki/Michael_Burry</a><p>> During his payments toward the credit default swaps, Burry suffered an investor revolt, where some investors in his fund worried his predictions were inaccurate and demanded to withdraw their capital. Eventually, Burry's analysis proved correct: He made a personal profit of $100 million and a profit for his remaining investors of more than $700 million.
Yeah, if Elon pulling off a Seig Heil and literally running away with a country's data wasn't good times to short, I don't know what will.<p>You basically need to predict his death at this point. Which is unlikely due to being rich and not extremely old. But not off the table if you look behind the scenes at his habits.
I do hold TSLQ (and it's been doing great). That being said, Musk has engaged openly in fraud on a regular basis and the SEC has done nothing. At this point I have zero faith in the markets to adhere to the law.
TSLQ has been doing barely okay. The problem with investment vehicles like TSLQ which are daily shorts, is that over a period of time, it will suffer the same drawbacks as holding a short position and therefore making the timing of the position very important.
Is it only Musk? Pretty sure the President himself is manipulating the market
If you're going to gamble on $TSLA, shorting is probably the worst way to do so. It has unlimited downside (well, at least as much your broker allows before margin calling)<p>If you want to gamble, buy put options and size according to how much money you're okay with losing (the premium is all you pay)
Shorting requires a timeframe. When?
... and the standard reply to this standard reply is "The market can remain irrational longer than you can remain solvent."
Silly. You should be selling off th ese trash stocks. Don't know why people keep recommending market cap weighted funds when they're being manipulated by scam artists like Elon and Trump into making the world's retirement funds into bag holders.
You forgot spacex, which will be also added, fast track :)
space datacenters will need tesla powerwalls. also, flying saucers are using tesla superchargers onow
>It has no business being in the S&P 500 and should quite frankly be delisted<p>S&P500 inclusion is a simple math calculation based on market cap. By definition, Tesla must be included until its value drops far enough to exclude it. That will probably never happen short of an apocalyptic event.
Misleading because it shows % of total decline as opposed to each ones decline. The bigger the company the more points they have to lose..., so Oracle for example losing 20 points may be a smaller % decline on their part than a samller company that looses less.
Just QQQ and chill. You get all of the hardware companies monster gains to offset the losses.
Where did that money go to ?
It was never really there to begin with.<p>The stock price is like the price on a restaurant menu. If you're the restaurant owner you don't make money just because you increase the prices on the menu. If you're a diner you don't spend money just by looking at menus in the window.
Depending on your POV, some air was let out of the hype machine (inflated prices fell closer to reality), or the market withdrew its trust in actual value (devaluing it in real, instant dollars).
Stocks that were driving the market in gains for two years are now going down? Who would have thought that these stocks might have been overbought by people...<p>S&P in general has been giving returns in the past ten years ~12%. Seems like more of the same to me.
I like how they keep making BS names to create their financial engineering BS marketing and narrative going. so it's The Hateful Eight now what for this year and next? It used to be, FAANG, MAG7,ZIRP this, ZIRP that, Gamestop reaching to their FT stories and every news reporting at same week and so many made up BS from finance engineers.<p>Media is ready to lie to you and feed you BS, just waiting order(s) from finance dep.