by Charles Cheng, CFA & MBA

 

 

Business monopolies are often thought of as harmful to economic development, with many monopolistic practices banned by governments. This is mainly to protect consumers from exploitive pricing practices as well as encourage innovation and competition. But on the flip side, for a business to grow over the long term and maintain its profit margins, it often must dominate its industry or some part of its industry, maintaining a monopoly-like hold over its market. Warren Buffett and Charlie Munger often talked about only investing in businesses with strong “economic moats” that helped them retain pricing power and discouraged competition. Peter Thiel is even more direct on this issue, saying that every successful business is a monopoly. Certainly, over recent decades, we’ve seen mega sized public companies dominate, which have likely helped overall market returns. Meanwhile small cap stock indices have lagged. This raises questions for investors as to what the implications are for constructing their own portfolios and whether to continue betting on this trend.

人們通常認為商業壟斷不利於經濟發展，因此許多壟斷行為已被政府禁止。　這主要是為了保護消費者免受價格剝削，並鼓勵創新和競爭。　但另一方面，企業要長期發展並維持利潤率，往往必須主導所在產業或部分產業，從而對市場保持類似壟斷的地位。　華倫·巴菲特和查理·芒格經常談到只投資那些擁有強大「護城河」的企業，這些護城河有助於它們保持定價權並抑制競爭。　彼得·蒂爾對此的看法更為直接，他認為每個成功的企業都是壟斷企業。　誠然，近幾十年來，我們看到大型上市公司佔據主導地位，這可能有助於提升整體市場回報。　同時，小盤股指數的表現卻落後於大盤。　這引發了投資人思考：這對建構投資組合有何影響？是否應該繼續押注這股趨勢？

 

The most important sign of this shift is the overwhelming dominance in the US of a few mega-companies, often called the “Magnificent Seven” (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla). Due to their growth and stock outperformance, together, these seven stocks now make up over one third of the S&P 500 Index. 

這一轉變最重要的標誌是少數幾家巨型公司在美國市場佔據絕對主導地位，這些公司通常被稱為「七巨頭」（Alphabet、亞馬遜、蘋果、Meta、微軟、英偉達和特斯拉）。　由於它們的成長和股票表現優異，這七隻股票合計佔據了標普500指數超過三分之一的權重。　

 

This appears in the divergence between market-capitalization-weighted and equal-weighted indices. The S&P 500 market-cap-weighted index and the S&P 500 Equal Weight Index track identical companies but weight them differently—market-cap weighting gives larger companies more influence, while equal-weighting assigns identical weight to each of the 500 constituents. According to Invesco, the S&P 500’s P/E ratio reached 28.0 in 2024, representing a 28% premium over the S&P 500 Equal Weight Index—a historical divergence.

這種轉變體現在市值加權指數和等權重指數之間的差異。　標普500市值加權指數和標普500等權重指數追蹤的是完全相同的公司，但使用的權重不同－市值加權賦予規模較大的公司更大的影響力，而等權重則為500家成分股賦予相同的權重。　根據景順集團（Invesco）預測，標普500指數的本益比將在2024年達到28.0倍，比標普500等權重指數高出28%——這是一個歷史性的差值。　

 

Also, small cap indices like the Russell 2000 have regularly underperformed large cap indices like the S&P 500 and Russell 1000 while having outperformed in the decades prior. Previously, smaller companies were less covered by institutional investors and valued lower, resulting in higher subsequent returns.  But with so much of market returns made by the largest companies, they inevitably began to lag.

此外，像羅素2000這樣的小型股指數雖然在過去幾十年表現優異，但近年來卻經常跑輸標普500和羅素1000等大盤股指數。　過去，小型公司受到的機構投資者關注較少，估值也較低，因此後續收益較高。　但由於市場的大部分收益都集中在最大的公司手中，小型股的表現不可避免地開始落後。　

 

What does this mean for investors going forward? The concentration of the S&P 500 means that investors holding market capitalization weighted index fund are taking greater degrees of single-stock and sector concentration. This could continue to work in their favor or could work against them. In the case of the S&P 500, the performance of their entire index is heavily reliant on the continued success of the Magnificent Seven and other large companies. While these companies have been the primary drivers of returns, any sharp regulatory action, technological disruption, or material slowdown in their growth could disproportionately harm the large market indices. With the ongoing A.I. revolution some of these larger companies are well positioned to improve their competitive advantages even further while others are vulnerable to being displaced. Regardless of whether the trend of giant companies dominating continues or not, investing in companies with strong economic moats should continue to be a winning strategy in any environment. Understanding the factors that create or disrupt these moats going forward will be the key in identifying outperformance.

這對未來的投資者意味著什麼？標普500指數的集中度意味著持有市值加權指數基金的投資人對個股和產業的集中度更高。　這可能繼續對他們有利，也可能對他們不利。　就標普500指數而言，其整體表現嚴重依賴「七大巨頭」和其他大型公司的持續成功。　雖然這些公司一直是收益的主要驅動力，但任何嚴厲的監管措施、技術顛覆或成長的顯著放緩都可能對大型市場指數造成不成比例的損害。　隨著人工智慧的不斷發展，一些大型企業憑藉其優勢，預計將進一步提升自身競爭力，而有些則可能面臨被取代的風險。　無論巨頭企業主導市場的趨勢是否會持續，投資於擁有強大護城河的企業在任何環境下都將是致勝之道。　

 

 

This article reflects the personal views of the author and not any firm’s and should not be viewed as an investment recommendation.

 

 

 

 

 

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