The (Not So) Magnificent 7

The Magnificent 7 companies: Alphabet, Apple, Amazon, Meta, Microsoft, Nvidia, and Tesla have been a dominant force in U.S. equity markets over the past few years, helping propel the performance of the S&P 500. Last year, these seven companies accounted for 48% of the benchmark's 23% price return. 

But their start to 2025 has been less inspiring, with same companies as a group returning -6% YTD (Jan, Feb). The S&P 500 as a whole is still up a modest 1.2% YTD. However, back in 2022, when the Mag 7 fell 40%, it pulled the S&P 500 down 19%. Without the Mag 7, the S&P 500 would have returned -8%. Maybe the pendulum swings back the same way in 2025. Given that these companies are collectively now a bigger weight of the S&P 500 at 30.6% than in 2022 (24.1%), the impact of a Mag 7 decline would be even more. 

MLB: Best Game Ever

Looking back at Ohtani's remarkable (ridiculous?) game from Oct 2024: 6 for 6; 3 HRs, 2SB, and 10 RBIs...

Chappelle Show, Chappelle Show...

Dave Chappelle was back...hosting the first SNL episode of 2025 (his fourth time overall). And he did not disappoint, riffing on the L.A. fires, Freak-Offs, immigrants, etc. in a trademark 17-minute monologue filled with hilarious but sharp commentary (most opening SNL stand-ups clock in around 7-8 minutes). Chappelle ended with words of empathy and compassion for displaced people..."whether in the Palisades or Palestine." Enjoy...

Love Me Some Eminem

 President Obama living his best life...at a rally for Harris. Lose yourself in cool.

Mad Max by Google

The Mad Max series is about an Australia where society has collapsed and lawless rules. Did Google nearly herald such anarchy in Oz? 

According to an Ars Technica report, Google Cloud accidentally deleted the account of the $135 billion Australian pension fund, UniSuper, including back-ups! In what is termed as an extremely rare incident of "misconfiguration", 650,000 UniSuper members couldn’t access their retirements accounts for a week.

“Google Cloud CEO, Thomas Kurian has confirmed that the disruption arose from an unprecedented sequence of events whereby an inadvertent misconfiguration during provisioning of UniSuper’s Private Cloud services ultimately resulted in the deletion of UniSuper’s Private Cloud subscription.” 

Further, while Google typically has duplications in different geographies to ensure that if one service goes down or is lost then it can be easily restored, because UniSuper's cloud subscription itself was deleted, it caused the deletion of all backups as well! Great! So, an unsubscribe button nearly wiped clean the retirement accounts of 2% of Australia's population.

Fortunately, UniSuper was able to eventually restore services because the fund had backups in place with another provider. As the proverb goes...don't put all your eggs in one hyperscaler basket!

Israeli Exceptionalism

In a powerful segment, Jon Stewart calls out American hypocrisy when comes to America's favorite ally. Referring to the conflict in Gaza, Stewart remarks that justice is beginning to "look like cruelty," but not to worry America is on the case with its "universal values." And then proceeds to expose the contrasts and glaring contradictions in Joe Biden's approach to the wars in Ukraine and Gaza. The journalist Spencer Ackerman effectively made the same argument in a scathing op-ed in the NYT, arguing America is undermining its credibility by having a different standard for Israel. As Stewart dryly notes, "Every time America tells the world that there’s something we won't allow, Israel seems to say, 'Challenge accepted.'"

Thanks Jon... it's all very "concerning".  

Markets: Technology is No Match for Staples

If AI is the future, then Nvidia is surely taking us there. The chip giant, the third biggest company in the world by market capitalization, is up 228% the past twelve months ending April 5, 2024. That's trully impressive. However, there's something decidedly much, much older doing even better--chocolates! The S&P GSCI Cocoa TR Index is up 277% over the same period! Weak crop yields in West Africa due to the effects of El Nino weather patterns are an important driver of the commodity's price surge. Countries such as Ivory Coast, Ghana, Nigeria, and Cameroon are responsible for over 70% of the world's cocoa output. On top of climate factors, political instability, poor governmental policies, and thin margins in these countries have deterred investments in new plantations for years, accentuating the supply/demand imbalance. The result has translated into soaring retail chocolate prices. The cost of chocolate prices in U.S. stores increased 11.6% in 2023, about three times higher than CPI (3.4%). Research has long shown chocolate contains compounds, such as phenylethylamine and tryptophan, that lifts moods and produces feelings of happiness. So, if cocoa prices continue to rise, it could make the world a less happy place!

Staples outperforming the best of tech is not unusual. Google (GOOGL) went public on August 19, 2004. Just a few weeks earlier, a decidedly less techie company, Domino's Pizza (DPZ), also IPO-ed. An investment in Google, held through April 5, 2024, would have returned 61x. Pretty, pretty...good. However, an investment in Domino's would have yielded 79x, almost 30% more! People love the internet, but their pizza even more!