Market Concentration in Perspective

  • The hot topic in equity markets for several months has been concentration at the top in a few mega-cap tech companies that are driving returns.
  • Global Financial Data (see chart and link in the sources) recently published an interesting history of market concentration in the U.S.
  • As a note, a couple large national banks accounted for most of the nation’s market cap early in its history.
  • Markets have obviously evolved significantly since the late 1700’s, but it’s worth seeing the data on a longer timescale to note the ebbs and flows over the past 100 years or so after the total number of public companies increased to a more modern level.
  • In conclusion the author notes that increased concentration is not a sign of impending doom. Moreso, bull markets tend to increase market concentration for an undetermined amount of time while bear markets decrease concentration until the next bull run.


Global Financial Data, 200 Years of Market Concentration – Global Financial Data

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