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Investment Strategies / Mechanical Investing
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Author: mungofitch ✹🐝🐝🐝🐝 SILVER
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Number: of 3959 
Subject: Re: Mungo MI - is it working?
Date: 06/06/2024 4:23 PM
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As for using an equal weight S&P index as your benchmark, that gives you an artificial advantage at present. The mega caps are significantly out running the equal weight index and have been doing so for some time, and it sounds like you're over weighted in the mega caps.

Mmm, maybe.

The stock prices of the very largest firms are doing very well lately, it's true, but on the other hand most of them are pretty profitable as well. There is apparent overvaluation ("prepaying for a bright future") in places for sure, but it's not particularly wild relative to the rest of the market.

In any case I'm not concentrated in super-giga-caps, the top 10 where the exuberant action (and cap weight index) has been. My holding's median market cap is about $40bn, and only 6% of the portfolio is in stocks over $300bn. Neither figure is much different from the S&P 500 list of stocks (and wildly smaller than the cap-weight index). That's why I figure the S&P equal weight is a reasonable benchmark.

Jim
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