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- 6/23
6/23
The Idea Farm
June 23, 2024
Together With
“Remember, cash is a fact, profit is an opinion.”
Research
UBS - The roar is getting a little louder: Assessing the “Roaring ‘20s” outlook for the US economy (47 pages)
UBS’ Jason Draho first wrote about the possibility of a Roaring 20s decade for the US economy back in 2021. This is an update on the possibility of that regime, which he puts close to 50%. He discusses this and the investment implications with Meb on The Meb Faber Show this week.
GFD looks at the rise of concentration in the U.S. stock market, analyzing 235 years of data. They make the case the trend in increased concentration will continue and this is not a reason to believe a bear market is imminent.
"As of May 31, the Top 10 Stocks had a market cap of $15.09 trillion which represented 34.07% of the S&P 500. The previous record level of concentration was 32.87% which occurred in 1963."
Facts & Figures
“Google, Amazon, Meta and Tesla, the Magnificent 7 have a $16 trillion combined market value, 34% of the S&P 500 and LARGER than the ENTIRE S&P as recently as February 2016.” Link
The MSCI All-World Index gives France a lower weighting than Nvidia, Microsoft, Apple or Alphabet. Link
The market cap per employee of Nvidia has hit almost $100,000,000. Link
In the 6 weeks leading up to June 5, Nvidia gained over $1 trillion in market cap (more than all of Berkshire Hathaway). Link
John Authers highlighted the performance of the Magnificent 7 since the start of 2020.
As of June 13, 2024
As of June 13, 2024
A recent BofA survey finds a very strong consensus that “Long Magnificent Seven” is the world’s most crowded trade. Link
As of June 19, 2024
BofA highlights the relationship between earnings and stock prices going back to the dotcom bubble.
h/t Sam Ro
The 60/40 portfolio just hit an all-time high. Link
As of June 19, 2024
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Podcasts
 6/8/24 - 72 minutes | Mark Suster speaks with Kirsten Green on the evolution of consumer-focused venture capital and how AI is impacting consumer companies today. |
 5/23/24 - 37 minutes | Ethan Penner starts by discussing his real estate career, which includes the creation of the CMBS market. Then he gets into topics from his book, Greatness Is a Choice. |
 5/31/24 - 69 minutes | This is a fun episode with Kevin Espiritu (aka The Plant Daddy) about how he turned his side hustle into a $45M business. |
What Else Is Happening
Did you miss last week’s email?
Meb Faber spoke with UBS’ Jason Draho about the possibility of a Roaring 20's for the U.S. economy.
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