S&P would have been down by 10% if......

First of all, due to the potential ban of using Wechat in the US, we need to set up a backup platform for my investment group. Telegram is the choice for my "DW  谈股论金" group. Here is the link via which you can easily join: https://t.me/joinchat/SgYa_xNrjTNHk9cS51ke0A. Of course you need to install the Telegram app first on your cell phone and then just click the link to join. No need to get an approval.

Also, just in case we lose connection for whatever reasons but you still want to follow my blogs, just save/ bookmark this blog address for future reference: https://redbullmoneytalk.blogspot.com/ You can visit it anytime for updates and check for the past blogs as well.

The market has never been so much concentrated! When you buy a broad market index like S&P 500, it's natural to think that you are very diversified across the 500 stocks in the index, right? Not so much anymore! Actually, the index is largely driven by 5 stocks,  the FAANG stocks. They refer to five of the most prominent and best-performing American technology stocks in the market: FB, AMZN, AAPL, NFLX and GOOGL. See the heatmap below. The size of each block in the map represents the company's market capitalization, or how much it's valued in the market. These five tech stocks are among the biggest, greenest blocks in the chart.  

And here is the chart view of their weight in the index with MSFT in lieu of NFLX.

                                                                                                                                                                               
So how powerful these stocks have in terms of their impact on the market performance? Well it is likely beyond your widest imagination!  

Here is any analysis that studies the impact of the 8 biggest stocks in the S&P index, which represents 30% of the total market cap of the 500 stocks. Right now, S&P 500 is nearly breaking even for the year, or has almost recovered all the loss from its Mar bloodbath crash. But this impressive recovery is largely due to the outstanding performance of the 8 stocks. Without them S&P500 would still have lost 10% by now. I don't know if we can call this market is healthy or rather skewed. 

We are indeed in a very interesting world now!!