"If you own the S&P, you own a lot of bad stuff with a few good names."

Market Concentration Risk - The market's return sequence leading into 2025, with a 50% increase in two years, was driven by too few names, indicating concentration risk [1] - Approximately 10 technology stocks are driving 70% of the earnings in the market, a trend consistent across the previous and current year [1] - The S&P 490 companies are underperforming relative to the top technology stocks [2] Earnings Growth Disparity - Overall earnings growth for the S&P is around 10% to 12%, while the top companies are experiencing earnings growth of 24% to 25% year-over-year [3] - The bottom portion of the market, consisting of 490 stocks, is lagging in earnings growth in a material way [3] Investment Strategy Implication - While owning the top-performing companies is desirable, it should be in the right proportion to the rest of the market [3]