We hear the warnings all the time. The market is only driven by a handful of massive tech stocks – and therefore, it's built on a weaker foundation than a market advancing on a broader swath of its constituents. We think that view is lazy and misguided.
In his Sunday column , Jim Cramer told Investing Club members that they should quit worrying about the triumph of tech and learn to love it. Jim wrote that investors should stop thinking, "This can't possibly last," and instead think, "Not only could it last but look for others to join in." That's because the halo of the artificial intelligence boom has started and will continue to benefit companies beyond technology.
But it's early days for Club industrials such as Eaton and Dover to get boosts from the retooling and building of data centers to handle AI workloads. Great companies are too great? In the meantime, what are we supposed to do? Tell investors to avoid the S & P 500 because the great companies found in the index are simply too great. Do the so-called market experts saying that not hear how ridiculous that sounds? Would it be better if we have a 500-stock index of 500 average stocks? Where do you think the S & P 500 would be today if not for the Super Six mega-cap tech names that we own in the Club portfolio? Does anyone think we would be better off if those stocks didn't outperform? This whole narrative reminds me of something we heard more than a few times back in 2022 when the market was selling off as a result.
