In this episode, Mark talks about how FANG stocks are helping the performance of the stock market. The bigger the market cap on the stock, the more it effects the stock market. Money made in the markets has been done by having more of a concentrated portfolio. Of the $36 trillion that has been created in the markets, half of it has come from a very small number of businesses in the portfolio. Since 1926, 1,000 stocks account for the $36 trillion in gains. The rest of the stocks did nothing. How do you hedge? Strategic cost averaging, which is strategically adding unequal dollar amounts to the portfolio in areas. Volatility is so important! Markets as a whole are not over valued and there are some stocks that are overvalued. In the absence of value price becomes the main point. The media is teaching people to blinding trust systems without proof of what it can do. When you’re buying an index, where are you putting your money? It is not appropriate asset allocating.
July 24, 2017