Are Markets Giving A False Sense of Diversification?

So we wrote an article recently talking about the S&P 500 and its lack of diversification.

Now, this reminds me of an analogy we often talk about, and that is that of a swimming pool.

So when we go to a swimming pool, we look and see where the deep end is, and we don't look at the average depth of that pool.

The S&P 500 that everyone tracks focuses on the average marketplace.

Can you tell us about where the deep end is today in the marketplace?

Right now, the deep end, and the deep end, we don't know how deep it is.

So I would say that the deep end right now is the AI concentration in the market.

Because right now we see hyperscalers spending hundreds of billions of dollars and it's supposed to reach $1 trillion most likely next year.

But we don't know the hidden risks in terms of revenue, return, and the winners and losers.

Because in every speculative bubble, and I'm not going to say this, we're in the last stages of a bubble.

But when there's a lot of capital investments, either in the past with railroads, canals, or even televisions, there's winners and losers.

So that is the hidden risk.

Are we in the winners? Are we in the real early stages? Or are we in the later stages where we're going to start to see some of these losers appear?

So we wrote an article recently talking about the S&P 500 and its lack of diversification.

Now, this reminds me of an analogy we often talk about, and that is that of a swimming pool.

So when we go to a swimming pool, we look and see where the deep end is, and we don't look at the average depth of that pool.

The S&P 500 that everyone tracks focuses on the average marketplace.

Can you tell us about where the deep end is today in the marketplace?

Right now, the deep end, and the deep end, we don't know how deep it is.

So I would say that the deep end right now is the AI concentration in the market.

Because right now we see hyperscalers spending hundreds of billions of dollars and it's supposed to reach $1 trillion most likely next year.

But we don't know the hidden risks in terms of revenue, return, and the winners and losers.

Because in every speculative bubble, and I'm not going to say this, we're in the last stages of a bubble.

But when there's a lot of capital investments, either in the past with railroads, canals, or even televisions, there's winners and losers.

So that is the hidden risk.

Are we in the winners? Are we in the real early stages? Or are we in the later stages where we're going to start to see some of these losers appear?