January 24, 2025· 36 min

Why the Stock Market Might Be at Peak Concentration Risk

Kevin Muir

Orality

Model

70%

Oral-dominant (speeches, podcasts, storytelling)

Speaker Breakdown

HostTracy Alloway(1,432 words)

M:29%

HostJoe Weisenthal(1,314 words)

M:95%

GuestKevin Muir(3,545 words)

M:94%

Oral Indicators

Agonistic25%

literally, completely, very

Engagement69%

you, our, your

Memory Aids100%

listen, now, so

Repetition100%

like (56x), they (54x), index (49x)

Parallelism95%

So come test your wits in fina..., And I'm Joe Wasenthal...., But, you know, these acronyms ...

Sound Patterns56%

40 question(s), alliteration: "markets move", alliteration: "barclays brief"

Formulaic Phrases11%

at the end of the day, you know what, i mean

Literate Indicators

Hedging9%

might, quite, maybe

Passive Voice8%

be worried, is experienced, been attracted

Abstract Nouns15%

investment, recommendation, announcement

Subordination8%

because, while, although

Sentence Length37%

Avg: 14.2 words/sentence

Word Complexity45%

investment, analyze, anticipate

Academic Markers0%

Impersonal Style31%

494 personal pronouns found

Descriptive Style73%

literally, completely, actually

Description

There's a lot of talk right now about concentration risk in US equities. For instance, the top 10 stocks in the S&P 500 currently account for 38% of the total index, compared to just 17.5% a decade ago. And all the big winners have been tech companies like Apple, Nvidia, Meta, etc., prompting questions about whether investors are getting overly-enthused about AI. For some, it's also bringing back memories of the dotcom bubble. So just how concentrated is the US stock market right now? What exactly is "concentration risk" anyway? What does this trend say about the power of benchmark index providers like S&P? And -- crucially -- are market participants doing anything about it? In this episode we speak with Kevin Muir, a.k.a. the Macro Tourist, about why he thinks the market is now at "peak concentration," and what could change to reduce Big Tech's dominance. Read more: Index Providers Rule the World—For Now, at Least Nvidia and Five Tech Giants Now Command 30% of the S&P 500 Index Only Bloomberg.com subscribers can get the Odd Lots newsletter in their inbox — now delivered every weekday — plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlots See omnystudio.com/listener for privacy information.

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