The book, Exponential Wealth: Centuries of Stock and Bond Returns, provides context on the concentration issue in US stocks. The adjusted HHI index places us at historic levels. The smaller-cap market is being squeezed. Is this good for investors? One could argue that any index has less diversification, and that market power will be more concentrated in these larger firms. Is there a need for more vigorous antitrust action? This tool of government has not been used, yet it may help restore more balance within the markets.
Saturday, October 24, 2026
The periods of pain in equities
This chart from Exponential Wealth: Centuries of Stock and Bond Returns shows significant, long periods of pain for US stocks. There has been a long drought since our last pain period. Should you be worried about this? We may not be at an inflection point, but history suggests the current path won't last forever.
The historical great divide in the bond market
I like the following graphic from Exponential Wealth: Centuries of Stock and Bond Returns. It makes clear that we were in two great bond environments: pre-1981 and post-1981. The high-inflation period reversed between 1981 and 2020. The real question is whether we are now in a new third regime. The big fixed-income bet is on what this new regime will be.
Asset management business - all about scale
McKinsey & Company has issued its report "Asset Management 2026: Plenty for the Few," which shows that the asset management business is about scale and increasing concentration. It is about gathering assets to improve operating margins in a world of falling fees.
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