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June 20, 2024 | A.I. Hype Has Magnified Market Downside

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel ( Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog:

A worthwhile discussion in this segment…

So far this year, the top 10 stocks in the S&P 500 have accounted for more than 76% of the index’s gain. This is the 2nd most concentrated reading for the S&P in the past 20 years. The highest percentage was 79%, achieved in 2007, right before the Global Financial Crisis. Are we in a new AI-powered Tech renaissance that will continue powering the markets higher for years to come? Or are we risking a major market breakdown, putting all our hopes in a handful of companies that can’t keep growing at the meteoric rates that Wall Street is expecting? For answers, we’re fortunate today to speak with Fred Hickey, editor of the highly respected newsletter The High Tech Strategist, which Fred has been publishing since 1987.

Here is a direct video link. 

As mentioned, as of this week, the five most expensive companies in the widely tracked S&P 500 index account for 27% of the basket’s price value (as shown below, courtesy of Slickcharts).This compares with an 18% concentration for the five most expensive companies at the tech top in 2000 and is nearly 2x the average 14% weight for the top 5 since 1980.


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June 20th, 2024

Posted In: Juggling Dynamite

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