This chart is a warning

[Aviation Pro]

A big fucking warning. Prepare.

[bucolic_frolic]

1. Those large cap tech names dominate everywhere

YouTube pundits, respected and not, have all been reaching the same conclusion these weeks.

The Mag-7 plus Tesla dominate index funds.

Large cap tech that feeds the Mag-7 are a significant portion of international, global, funds, indexed and non-indexed.

Mid-caps have been wobbling in a range since June.

5% of companies - large caps - earn 90-95% of all corporate earnings in America.

I spent the afternoon looking at large cap AI Tech ETFs. Same names, in different concentrations.

Don't know if hiding in the few dozen Long-Short ETFs provides any protection. They can be very volatile, and a wrong bet is still a wrong bet.

Even managed funds try to juice performance with a few Big Tech positions.

Also on the YouTubes, debt - government and private - is an issue. Private credit is a large space, and regional banks are beholden to them.

There are ETFs with that old 2008 bugaboo - Consolidated Debt Obligations. Will it be different this time with private credit mixed in?

I'm wondering if spending stalls from AI job cuts and inflation and recession, who will have earnings? Sounds like a liquidity crunch but the Fed is pinned down - recession if they don't cut rates and provide liquidity with some form of QE, or stagflation if they do.

I know, I know, Trump tariffs will rescue us all like Titanic lifeboats.

[genxlib]

2. In case you had the same question as me

The Magnificent 7 stocks are Alphabet (Google), Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla

Ironically told to me by one of them.

This the AI bubble hiding in plain site.

This is an excellent article about it here. https://prospect.org/2025/11/19/ai-bubble-bigger-than-you-think/

[JT45242]

3. To be fair, 132 percent over five years is well above average

From 1970 to 2019 the average gain was about 12 percent per year, which is much less than 142 percent over a five year span.

Of course, a lot of that had to do with how well Biden handled the Covid recovery

[edhopper]

6. The market

crashed in the 70s
And didn't recover for 16 years.
Do an analysis from 1980 and you get a different result

[JT45242]

7. Looked it up...80 to 2025

Average was about 11.7 for the S&P, just under 9 percent inflation adjusted.

About the same DJIA.

Going back to 1970, was about 10 percent per year, 7-8 percent after inflation.

So, the rate is higher in general over this last bit. But, investment people told me early on in adulthood, if you use an index fund long term expect to gain 8ish percent over inflation on average. Plan so that you can live on five percent of your principal and you should likely never eat into the principal (assumes you don't burn $100k a year in a nursing home).

One of the few good things of rolling out of a teachers pension program into 403b was that when I die, the money becomes generational wealth to pass on to my kids. Of course, no pension based the health care is the big downside.

Not saying the stock market is any indication of the health of the economy, just noting that the return rate recently is higher than long term historical trends.

[edhopper]

8. And as the chart shows

especially in the last couple of years, we are most likely in a a Bubble.
Why I have pared down my stocks in favor of bonds and CDs. An AI crash is coming.

[hunter]

4. Are the "Magnificent Seven" making the world a better place?

I don't think so.

[JustABozoOnThisBus]

9. "Microsoft" makes my world better.

If I had to rely on Linux, I'd spend hours trying to connect to DU.