00:00Jim, do we see those sectors playing catch-up at the expense of tech or in addition to tech?
00:06Do you think money will still flow into tech?
00:08And if not, does that amount to more muted market gains because the S&P 500 is so heavily weighted toward big tech?
00:15That's the big question and the great question, Charlie, because to me that is still quite a bit of a question mark in my mind.
00:24But here's where I leave at the moment.
00:27I would not outright just sell tech.
00:30I don't think this is very likely anything like the dot-com top where anything remotely tech is going to not only underperform but collapse.
00:41I don't think that's what we're looking at.
00:43I don't think we're going to have a recession anytime soon.
00:47And so I think that tech will participate in any ongoing bull market.
00:51But I think it underperforms from here.
00:53I think these other areas with policy leverage that they get more benefit from than does technology stocks and the fact that they're so much more relatively undervalued are going to start to become more popular and favorite.
01:07And as a result, people will probably lead to allowing their tech weightings to decline or physically reduce them somewhat.
01:15Everyone probably is pretty highly with tech.
01:19And I think that's going to lead to some not wholesale selling like a panic.
01:23But I think it's going to lead to a slow lead of reducing those overweights in that area when they chronically sort of underperform.
01:32And, yeah, I think that the result of that is probably going to be that the S&P 500 probably does a little less average percentage gains from here compared to the broader marketplace.
01:45You know, if we've been doing 1012 in this bull market so far in the S&P, a big chunk of that is because the tech stocks, the mag sevens have been doing far better than that, offsetting weakness elsewhere.
01:59And going forward, I think we'll have a positive but much less returns in technology relative to the broader stock market gains.
02:08And that means probably S&P 500 underperforms, you know, maybe the Wilshire or the Value Line, you know, overall index or particularly just some of these other sectors like small cap stocks for a while.
02:20So my feeling is I wouldn't panic and sell out, but I do think they're going to be the underperformers during the balance of this bull.
02:30And it's the reason, another reason I wouldn't sell out.
02:34It is because I'm sorry, but new era technology in this cycle in particular is unique and it's unprecedented.
02:45I don't think this is like the Industrial Revolution or the invention of fire or anything else.
02:51This is something different that chronic technological advances are being made going on and on.
02:57We've invented the automobile and it's still about the same today it was when it was invented.
03:02Okay.
03:02We invented the airplane.
03:04It still does about the same thing it did then.
03:06But technology, when it first came out with IBM in the 60s and we had a computer the size of a warehouse that did some calculation for NASA and others, that's totally different today.
03:21It continues to remake itself.
03:22So I don't think, I think you want to own tech even when you don't think it's going to outperform because you never know when that brand new sizzling innovation is going to arrive and take over all the motion in the room.
03:37So I would go to underway position, but I wouldn't dismiss it.
