Re:Five Biggest Stocks Are 23% of S&P 500 Market Cap
by Balgair on Monday November 30, 2020 @10:24AM
(#25254682)
I would suspect that most of the stock markets over time are distributed as a power law.
These distributions come up all over the place, from the sizes of asteroids, to the populations of cities. I'm not sure exactly why this is, but I seem to recall that it's related to the integrals of normal distributions.
In 1964 the five biggest made up 27.60%:
* https://theirrelevantinvestor.com/2020/04/21/the-only-thing-...
In 1964, AT&T alone made up 8.90% and in 1969 IBM alone made up 9.00%.
The author of this story needs to look into history more and go back more than just thirty years.
Companies and industries rise and fall and have for centuries in the stock market:
* https://en.wikipedia.org/wiki/Technological_Revolutions_and_...
> This paper argues that the two boom and bust episodes of the turn of the Century –the Internet mania and crash of 1990s and the easy liquidity boom and bust of 2000s– are two distinct components of a single structural phenomenon. They are essentially the equivalent of 1929 developed in two stages, one centred on technological innovation, the other on financial innovation. Hence, the frequent references to that crash, to the 1930s and to Bretton Woods, are not simple journalistic metaphors for interpreting the “credit crunch” and its solution, but rather the intuitive recognition of a fundamental similarity between those events and the current ones. The paper holds that such major boom and bust episodes are endogenous to the way in which the market economy evolves and assimilates successive technological revolutions. It will discuss why it occurred in two bubbles on this occasion; it examines the differences and continuities between the two episodes and presents an interpretation of their nature and consequences.
* PDF: http://www.carlotaperez.org/downloads/pubs/C.PEREZ_CJE_Doubl...