We’re back, baby!

Check this out:

In other words, buying the S&P 500 (or index hugging mutual funds for that matter) has never been this concentrated.

But wait, it gets even better, according to S&P Global:

Big Tech is largely fueling the S&P 500’s positive performance in 2023, with investors buying just seven stocks and selling pretty much everything else.

Those seven stocks — Apple Inc., Alphabet Inc., Meta Platforms Inc. Microsoft Corp., NVIDIA Corp., Amazon.com Inc. and Tesla Inc. — have seen significant gains after a bleak 2022, and the collective gains have kept the S&P 500 in positive territory in 2023, with the overall index rising about 7% since the start of the year. Without these seven stocks, which make up nearly 26% of the large-cap index’s total weight, the S&P 500 would be down 0.8% on the year, through May 16.

So the “Big 7” make up 26% of the S&P 500.

We cringe at having more than a 2% weighting to any one stock or 10% to any one sector as being too risky. The S&P 500 (by default the vast majority of investors) makes us look like boring old ultra conservative farts. Perhaps we aren’t taking enough risk?


Well, well, well…

Toxic coal keeps getting more and more “toxic.” Here’s the Sydney Morning Herald:

Here’s an excerpt:

Australia’s big banks have turned their backs on the country’s largest pure-play coal miner, refusing to refinance a billion-dollar debt in a major rebuff that will force Whitehaven Coal to source loans offshore, sending a worrying signal to other large coal producers and potentially speeding up the demise of the sector.

Now, this is hardly news. The banks in the land down under are merely following in the footsteps of Citi, Barclays, Deutsche Bank, and the likes who are pulling out all the stops to get rid of thermal coal.

But guess what? While these ESG champions are restricting supply, demand for coal is hitting new highs.

From the article:

Coal consumption increased by 3.3% to hit a fresh record high of 8.3 billion metric tons in 2022, the International Energy Agency said Thursday.


Geographically, the picture in 2023 is mixed. “By region, coal demand fell faster than previously expected in the first half of this year in the United States and the European Union — by 24% and 16%, respectively,” the IEA said in a statement accompanying its report.

“However, demand from the two largest consumers, China and India, grew by over 5% during the first half, more than offsetting declines elsewhere,” it added.

Now, here’s what the pointy shoes at the IEA says is in store for coal (h/t @SStapczynski):

In line with what we said in one of these missives back in 2021:

When it comes to coal, it’s a discussion on China and India. Everything else is noise (but don’t tell the greenies that).

God bless the greenies!

While they are busy peddling their “renewable” pipedream, we keep scooping up the bargains in coal. In the most recent issue of Insider Newsletter, we profiled one of those bargains — a stock going for… deep breath… 2x earnings.


Feels like a lifetime ago, when — back in February 2020 — we started warning that lockdowns will bring about inflation and shortages. Fast forward to today, and this pesky stuff is now part of our daily lives. We recently set up a dedicated inflation channel in our Insider private forum, where members can share their own experiences with all things “transitory”.

This week, member Lynn took here lawnmower in for a repair, but it didn’t go as smoothly as normally:

Here is a shortages story. Took my lawnmower to the repair guy. A tiny outer suburban store. A few years ago he would fix on the spot and act like he wouldn’t accept payment because we had a nice chat! This time I said I would love to mow in the afternoon as the next rain front is coming in by Tuesday and he told me he has 700 mowers to repair before he can get onto mine! Is he the only lawnmower fix-it guy still alive after the mandated medical thingies?


John Huber of Saber Capital Management (@JohnHuber72) tweeted (or is it x-ed now?) the following gem about Warren Buffett’s recent foray into Japan:

Buffett invested in 5 Japanese stocks in 2020. That initial basket investment is up over 3x in 3 years, a 44% CAGR on that initial purchase.

It’s a market we (and Insider Newsletter readers) will be pretty familiar with. Here’s what Chris wrote about Japanese stocks back in 2017:

The Japanese equity market peaked in 1989. Let’s say you were 20 years old at the time and just starting working. Now you are 48 (let’s round it to 50), which means no one less than 50 years old has ever known a bull market in equities. Wow!

In fact, it is probably more than that because precious few under the age of 30 bother to invest in equities for their retirement. As such, we could argue that no one under 60 has ever made money from investing in a broad basket of Japanese stocks.

I get the feeling that the Japanese equity market is gearing up to make up for lost time in a big way.

Remember, we alerted you to this back when the Nikkei was around 17,000. It’s just broken a 25-year trend line and sits at 22,000. We continue to think this particular party is just getting started.

Today, the Nikkei sits at 32,000 and a change. Better than a poke in the eye with a sharp stick.


Here’s to never losing track of progress (credit for this one goes to Insider member Sean)!

Have a great weekend!


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