How to Listen When Markets Speak by Lawrence G. McDonald

Author:Lawrence G. McDonald [McDonald, Lawrence G.]
Language: eng
Format: epub
Publisher: Crown
Published: 2024-03-26T00:00:00+00:00

Massive Distortion of Capital in Financial Markets

In late 2021, $20 trillion was locked up in Nasdaq 100 stocks alone through the massive QQQ ETF, which tracks these names. In the Nasdaq 100 itself, 48 percent is concentrated in its top eight holdings. Through passive investing, America has overdosed on financial assets: bonds and growth stocks. These are just pieces of paper; they’re promissory notes from companies predicated on mostly unrealized future profitability. Meanwhile, the stocks in the XLE energy ETF have a market cap of just $1.6 trillion. The constituents of the global metals and miners ETF have a combined market cap of $1.8 trillion. So there was little more than $3 trillion invested in hard assets and more than $20 trillion in growth stocks. The trouble is, when you go into a high-inflation regime like we saw between 1968 and 1980, markets tend to rotate meaningfully into hard assets and value stocks and away from growth. Because of how growth-heavy the average American’s portfolio has become, a similar rotation during the inflationary coming period could inflict devastating financial carnage.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.