The headline assumes tech is overweighted because investors made a conscious decision. Wrong. They bought what went up. Then it stopped going up. Now they're discovering the rest of the market exists.
This is not strategic portfolio construction. This is watching your neighbor's house appreciate while yours catches fire.
The article frames this as some profound market rotation. It's not. People who chased Nvidia at 140 times earnings are now learning that insurance companies and industrial stocks also trade on exchanges. Groundbreaking stuff. Next they'll figure out bonds exist.
Here's the terrific opportunity nobody wants to mention: if you weren't braindead overweight tech in the first place, you didn't need to discover anything. You already owned the stocks that are working. You've been making money this whole time. But that's boring. No CNBC segment for the guy who bought Caterpillar two years ago and went to bed.
The big unanswered question is apparently how long these opportunities can exist before tech bagholders notice. I'll answer it. Forever. Because the same people who rode Microsoft down 30 percent are not suddenly going to become value investors. They're going to wait for tech to bounce, buy more, and ride it down again.
Diversification is what you do before you need it. After you need it, it's called panic.
Chart guys have been screaming about breadth expansion for months. Nobody listened. They were too busy buying the dip on software companies with no earnings. Now the dip bought them.
You don't get credit for finding stocks that work after the ones you owned stopped working. That's not opportunity. That's tuition.
Photo by Adam Śmigielski on Unsplash
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