I wouldn't say it's a fallacy. It's just an interesting way to look at the data.

I think more people need to be talking about the fact that the S&P 500 has extreme concentration risks that didn't exist 15+ years ago (and the Chart of the Day demonstrates that). We're in uncharted territories re: market cap concentration.

It becomes less interesting the more the “overweight” stocks correct.

The extreme concentration risk lessens as these 8 stocks fall in value compared to the rest.

I also don’t personally see the risk in the concentration. Risk of what? These companies are legitimately larger and doing more business than other firms.

Pick a median consumer. Which company are they sending more profit to than companies like Apple or Amazon?

10 years ago the average consumer maybe bought an iPhone from Apple every 3 years, so they gave Apple less than $100 of pure profit dollars per year.

Now that same consumer is giving Apple money for the iPhone, but also spending on services that they weren’t buying 10 years ago. If they’ve got an Apple One subscription they’re now sending Apple double or triple the profit they used to get.

These companies are big because they sell more things and are more diversified than they were in the past.

There’s no concentration risk. I’d actually argue that the concentration risk can be resolved overnight through antitrust regulation (e.g., force Apple and Amazon to split into multiple companies, as they already have obvious verticals that could stand alone).