The MSN link on the post doesn't have the charts the original WaPo article [0] contains, which provide just such a comparison, though over a longer period (from 2019), showing 132% vs 1057%. (No idea if that is right or more/less meaningful, just pointing out it's missed off this link.)

[0] https://www.washingtonpost.com/business/2025/11/24/sp500-sto...

Good point, but you also need to correct for inflation - which was about 9.5% if I'm looking it up correctly. Adding a 2% yearly EUR inflation, that eats up 11.5% of the value.

This gives 4% real value growthy for XMAG - and 5.2% for MAG7. It also needs to account that Trump's election and the tariff craziness was almost exactly a year ago, so the numbers might be a bit unreliable.

This raises interesting questions about the profitability of AI - if AI was economically valuable, we'd see network effects on companies that produce AI inputs - power, datacenter, servers etc. or other companies becoming more valuable as a result which doesn't seem to be tha case.

Correct! Backtest and compare ratios to common indexes!

If we made a similar comparison to the SP500 index since its inception in 1926, and made a chart of total returns difference over 1 year sliding window, between index and index minus it's top 7 performing stocks, i bet we will see this recent period isn't at all exceptional. Every economic boom is propelled by one or two sectors that have a limited number of players.

Without paywal: https://archive.is/qOjdE

Yes, it would be good if the URL could be changed to this as the MSN link misses out all the charts, which are rather crucial.

I guess the story here is more like

If you take the Top 500 companies as an indicator how well your economy is doing, but everything is carried on the shoulders of only 1.4% of those 500 companies then what is the point of looking at the 500 companies in the first place.

Make an S&P10 then instead. or in addition to the S&P500

That would probably be a good way to look at it anyway. Looking at the trend of the S&P10 vs. S&P500 and if they agree then thumbs up, but if they disagree then things might not be as rosy as everyone thinks

And those companies still did extremely well. It just so happens that the top 7 of them did insanely well.

No, it's about relative value. Obviously it's a tautology to announce that you've discovered that stocks that did really well outperformed ones that didn't.

The interesting thing is that the aggregate market gains are almost entirely concentrated in those stocks. It's not a statement about sorting, it's a statement about distribution.

It works until it doesn't. And it can stop working very fast. Which is the scary part. But then it also depends on entry point. If you entered early even going down say 40% or 60% might not make you go red.

It's only a "strategy" because you know what happened to the share price. If you can tell the future why not buy the lottery instead.

> So a viable strategy would be to only buy the best 7 stocks? Like the Dogs of the Dow, but reversed? (The Gods of the Dow?)

Or go with a NASDAQ 100 index: you'll generally get higher returns than the S&P 500 or Russell 3000, but you'll also get higher volatility. How well would you sleep at night with drops of -20% more often?

* https://www.investopedia.com/nasdaq-100-or-s-and-p-500-the-b...

Reminder that US stocks can do badly (and the only thing that could save US domestic investors is bonds):

* https://www.forbes.com/sites/investor/2010/12/17/the-lost-de...

Yeah, investing in the top companies leads to higher returns for most periods when looking short term.

Over longer periods, the top companies by market cap tend to change though. https://www.investmentnews.com/equities/only-one-of-the-worl...

So if you want to invest in the top companies, you either need to think they won’t change anymore, or you need to find when to buy and sell. Index funds solve this problem for you, albeit with slightly lower returns in the short term.

This is probably ok if you consistently sell stuff that exits the top7 and buy stuff that enters, but I kinda doubt it's all that much better. Same as the s&p500 and the Russell 5000 have really similar returns.

You'll be more exposed to screwing things up when companies enter/leave.

Yes. If you know which stocks will do best over the next year (or other time period), only buy those.

All those ended pretty badly, right?

I think that the overall point is that gargantuan big tech capex is hiding an overall weakness in the economy.

Only because this is a crap link.

https://www.washingtonpost.com/business/2025/11/24/sp500-sto...

https://archive.is/qOjdE

Such as? (edit: to clarify, since you apparently downvoted me for asking [lmao], what exactly are these 3-5 alleged success stories for monopolism/crony capitalism that ChatGPT told you about?)

Because of how well its stock has done since 2020 compared to the s&p 493.

> propaganda. "the economy isn't actually good!"

The thing is, there are three distinct interpretations of the word "economy", and depending on which of the definitions you subscribe (or belong) to, either of "the economy is good/okay/bad" can be true!

1) being the economy for the (uber) rich, "big tech", "big seven", FAANG, however you want to call it. That economy is running hot on 'roids "thanks" to the AI ouroboros / bubble / incestuous investment relationships. Money printer go brr. You get it. The only thing you have to take care about now if you belong to that bubble is to slowly unwind enough bags onto clueless retail gamblers before the bubble pops.

2) being the economy for the pension funds, the value of all the "dumb capital", S&P 500/DAX/MSCI and the likes. That economy is doing ... okay-ish, partially thanks to the AI bubble, but when that bubble pops, it's going to have Covid/2007ff effects on the pension funds.

3) being the economy for the 99% - and that economy is in the gutter. On the income side, job losses run rampant across the board, especially "entry level" jobs but also skilled jobs like translators are getting wiped out by AI, and in other industries (advertising, "luxury" goods) the cause is people cutting back on spending because they don't have any money left or are holding their money together because they fear a serious macro-economic disaster. On the expense side, cost of living have been exploding for years without adequate salary hikes - rents, basic groceries, cable TV and its replacement of half a dozen of streaming services, gas, electricity, the impact of Trump's tariffs, whatever.

Not recognizing (or ignoring) these wildly different realities is what killed Trump 1, Biden and is now killing Trump 2. You can't go and yap on the big screen about the economy being at record highs while the actual reality on the ground is everything but that. And it's not just the US that has these problems either, it's the same across the board in Western countries. The only thing the US has "exclusively" is the tariffs.