Seeking Alpha by Adding Beta

Early Aug of 1720, stock price of South Sea company reached 1000 pounds (from 100 pounds at start of year).  The year was marked with many companies with lunatic, dubious and fraudulent business plans were formed and their stock prices increased many-fold. One company's plan was " For carrying-on an undertaking of great advantage but no-one to know what it is”...sounds very similar to 2020's SPAC IPOs which are coming to market. By 1720 year end, many of these companies stock were worthless. Even South Sea stock returned to gravity and ended year with price close to 100 pounds. Many aristocrats,  parliamentarians and even King George I lost money. Talking about gravity, even Newton could not resist the temptation of quick money and invested in the South Sea company and lost significant amount of his fortune. So why is this relevant today? First of all, its 300 year anniversary of that historic bubble! Second, humans don't change/learn even after multiple...

Changing of the Guard  refers to a ceremony during which soldiers  or other officials guarding a major  government   building  or  state   residence , especially  Buckingham Place  in England, are replaced by a new  shift . It also means a group of individuals or organizations is replaced with another individuals or group. (source Wikipedia). Last few weeks of market action has demonstrated that similar trend of "Changing  of the Guard" is gaining momentum in valuations of sectors and groups of companies. The trend is always there but gets momentum when major shift happens (like in dot.com era and recently has been expedited due to COVID pandemic).  "Sector" Changing of The Guard: Looking at two market bottoms - March 2009 and March 2020 illustrate on how S&P sector weightage has  changed just in 11 years. Mar 2009: Information Technology: 18% Healthcare: 15.1% Energy: 13% Consumer Staples: 12.8%...