The Agony and Ecstasy • EMEA Edition | Idea Farm

The Agony and Ecstasy • EMEA Edition

J.P. Morgan Asset Management

Research

24 Pages

November 2025

Michael Cembalest first published the ‘Agony & Ecstasy’ analysis in 2004, and the EMEA team released an updated version based on June 2025 data. It explores the risks and rewards of concentrated stock positions, highlighting historical wealth destruction, sector cycles, and strategies for diversification, monetization, and hedging. You can read the most updated version (2024) of Cembalest’s paper here.

Date Published: October 2025

Key Takeaways

Concentration risk high: 41% of FTSE All-Share stocks fell 70%+ from peak and never rebounded; 62% lagged the index lifetime.

Few lasting winners: Only ~10% of stocks outperformed by 500%+, while tech had a 68% failure rate versus just 6% in utilities.

Small caps most fragile: Over 80% of catastrophic losses occurred in small caps; median recovery time from peak losses exceeded five years.

Portfolio Management Diversification

Join our newsletter to have all of this content + Exclusive Newsletter Bonus Content delivered to your inbox every week

Related Content

Asset Allocation

A Positive Stock-Bond Correlation Is a Terrible Reason to Add More Equity Risk to Your Portfolio

Apr 2026

Asset Allocation

A Second Opinion on the 60/40 Default: Just What the Doctor Ordered

Apr 2026

Portfolio Management

Share Repurchases and Investment Policies

Apr 2026

The information contained in this communication is of a general nature for informational purposes only, and does not constitute financial, investment, tax or legal advice. The information contained within this communication reflects the opinions of those referenced herein, and do not reflect the opinions of The Idea Farm, L.P. and its affiliates. Such opinions expressed herein are as of the date of production and are subject to change at any time without notice due to various factors, including changing market conditions or tax laws. Where data or information prepared by third parties is presented, no representation, warranty, or undertaking, expressed or implied, is given to the accuracy or completeness of such information by The Idea Farm, L.P. or any other person. While such sources are believed to be reliable, The Idea Farm, L.P. does not assume any responsibility for the accuracy or completeness of such information and does not undertake any obligation to update the information contained herein as of any future date. Any links to third party websites are offered only for use at your own discretion. The Idea Farm L.P., and its affiliates, are separate and unaffiliated from any third parties listed herein and are not responsible for their products, services, policies or the content of their website. All investments are subject to varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy or product referenced directly or indirectly in this communication will be profitable, perform equally to any corresponding indicated historical performance level(s), or be suitable for your portfolio. Past performance is not an indicator of future results.