The Sunday Drive - 08/17/2025 Edition [#176]
Musings and Meanderings of a Financial Provocateur
šš¼ Hello friends! Letās enjoy a leisurely Sunday Drive around the internet.
š¶ Vibin'
Itās been a while since we had a good olā mashup. I hope you enjoy this one, set to Michael Jacksonās classic hit, Donāt Stop āTil You Get Enough.
š Ā Quote of the Weekā
āThe older I get the more I realize how many kinds of smart there are. There are a lot of kinds of smart. There are a lot of kinds of stupid, too.ā
ā Jeff Bezos
š Ā Chart of the Week
Index Concentration: A Bit of Context
This weekās Chart shows the earnings growth of the 10 largest stocks in the S&P 500 and the earnings growth of the āS&P 490ā - the rest of the index. The difference in growth rates between the two groups is quite dramatic, and I think it lends some context to the much discussed concern about index concentration.
The excellent performance of the mega-tech names in recent years has been driven by investors rewarding this outstanding earnings growth, with the expectation that it will continue for quite some time.
In short, they earned it. Literally.
Ten years ago, the so-called Magnificent 7 werenāt nearly as dominant, representing roughly 12% of the index. Today, those names represent 34% of the S&P 500. Source: Motley Fool.
Weāve gone from a relatively diversified index to one where mega-cap tech (and a few others) disproportionately lift the whole market. Itās certainly a concentration risk but also a clarity lens.
When and to what degree these biggest names begin to suffer from the ālaw of large numbersā and earnings growth slows, is anyoneās guess.
When and to what degree the rest of the market begins to show an acceleration in earnings growth driven by, among other things, lower interest rates and more policy certainty, is also anyoneās guess.
These two things donāt have to happen at the same time, but they could. Orā¦ one could happen and not the other. That too is anyoneās guess.
When it comes to investing, guessing games stink. My philosophy remains the same: stay invested, stay diversified, and stay focused on your long term goals.
š Interesting Drive-By's š
š Building an American TSMC
šø I Found 12 People Who Ditched Their Expensive Software for AI-built Tools
šÆ Ancient Wisdom: The World Says, āQuit,ā But Iām Not Done Yet
š” Home(ish) | The Scuttlebutt
šš¼ Parting Thought
It took 70 years, but it finally happenedā¦
If you have any cool articles or ideas that might be interesting for future Sunday Drive-by's, please send them along or tweet 'em (X āem?) at me.
Please note that the content in The Sunday Drive is intended for informational purposes only, and is in no way intended to be financial, legal, tax, marital, or even cooking advice. Consult your own professionals as needed. The views expressed in The Sunday Drive are mine alone, and are not necessarily the views of Investment Research Partners.
āI hope you have a relaxing weekend and a great week ahead. See you next Sunday...
Your faithful financial provocateur,
-Mikeā
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