Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.

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Rethinkings

Public Policy After Utopia by Will Wilkinson (Niskanen Center)

A case for evidenced-based policy making and an eschewing of “the perfect world” that radicals of all kinds think they can achieve, but are often unable to show would actually move forward their goals. [Link]

A Peek at Future Jobs Shows Growing Economic Divides by Ben Casselman (NYT)

Huge swathes of the country have employment landscapes dominated by jobs that are estimated to shrink by 2026 per new BLS data. [Link; soft paywall]

Investing

The Morningstar Mirage by Kirsten Grind, Tom McGinty and Sarah Krouse (WSJ)

Investors flock to funds that receive a coveted five star rating from Morningstar, but returns don’t tend to be much higher for funds with more stars. [Link; paywall]

Inflation

How I Accidentally Stiffed My Poor Venezuelan Waiter by Stephen Merelman (Bloomberg)

When the amount of cash you need to accomplish daily tasks rises into the “grocery bags” denomination, even tipping becomes a major challenge. [Link]

The Lighter Side

So This Happened in Our Comments Section Today by Nancy Wartik (NYT)

Never read the comments, except for this one. [Link; soft paywall]

Blockchain

This Company Added the Word ‘Blockchain’ to Its Name and Saw Its Shares Surge 394% by Lisa Pham (Bloomberg)

A company with little to offer got investors to bid up its shares by almost 4x on a simply name change, in case you’re wondering what sentiment around cryptocurrencies looks like. [Link]

Backed by Dollar Scarcity, Price of Bitcoin Caps $10,000 in Zimbabwe by William P (Crypto Analyst)

The exchange which services Zimbabwe has seen an explosion in local prices for bitcoin, driven by huge domestic demand and a lack of arbitrage. [Link]

Tech Dystopia

The 12 Most Desperate Stunts Cities Have Pulled To Woo Amazon’s New H.Q. by Maya Kosoff (Vanity Fair)

Buying (and reviewing!) 1000 separate items, Spotify playlists, noisemeters at hockey games, a 21 foot cactus, free sandwiches, and more. [Link]

Elon Musk Was Wrong About Self-Driving Teslas by Tom Randall (Bloomberg)

Tesla owners are suing over a feature that hasn’t lived up to its much-hyped debut buzz last year, and doesn’t show any sign of being ready soon. [Link]

New Chatbots Will Help People Accept Death by Jordan Pearson (Vice)

While chatbots are proving helpful for people unaware of basic legal and medical planning for the end of their lives, they’re not going to be providing much in terms of spiritual guidance any time soon. [Link]

Food & Drink

‘Fish Fraud’ Is Rampant. Here’s How to Fix It by Elizabeth Dunn (WSJ)

As much as one third of US seafood is mislabeled, and with 90% it imported there’s lots of room for standards in the market to propagate better practices elsewhere around the world. [Link; paywall]

World wine production ‘to hit 50-year low’ (BBC)

+15% declines in Italy, Spain, and France brought about by weather mean global grape growth has slowed dramatically. Australia and Argentina will be up while the US crop should be little changed (forest fires in California came after most of the harvest). [Link]

The Thing About Bisquick by Alia Akkam (Taste Cooking)

For our two cents, biscuits don’t need anything more than flour, milk, butter, baking powder, and a bit of honey. But Bisquick is defensible if only for its time saving properties. [Link]

Long Reads

Under The Darkest Sky by Jasmina Keleman (Roads And Kingdoms)

In wide open Texas, the limitless night skies are in need of conservation; not against traditional threats to visibility, but from the even more pernicious footprint of human civilization, light. [Link]

How Martin Luther Changed The World by Joan Acocella (The New Yorker)

While the man who launched the Reformation probably never nailed his 95 Theses to a church door, he was still a fascinating and truly revolutionary character who has deeply shaped our modern world. [Link]

Have a great Sunday!

The S&P 500 Technology sector is up huge today, rallying 2.6% on a day when the S&P 500 as a whole is only marginally higher.  As shown below, the sector has moved up into the stratosphere compared to its normal trading range.  At this point in time, the sector is trading three standard deviations above its 50-day moving average.  These kinds of overbought levels don’t last long, as either a pullback in price occurs or moving averages start to play catch up.

The move higher in the Tech sector has caused its weighting in the S&P 500 to balloon up to 24.2%.  That’s almost ten percentage points larger than the 2nd largest sector in the S&P 500 — Financials.  It’s also more than 12x as large as the smallest sector in the index — Telecom.  Finally, Tech is now just as large as the smallest SIX sectors in the S&P.

Below is a chart showing Tech’s weighting in the S&P 500 going back to 1990.  You may not know it, but Tech was actually the SMALLEST sector in the S&P back in 1991.  My how times have changed!

If it provides any comfort, while 24.2% is a huge weighting, keep in mind that it’s still 10 percentage points lower than the weighting Tech saw at the end of the Dot Com boom back in the late 1990s.  At Tech’s peak back in March 2000, it had a record 34.81% weighting in the S&P.  Even still, Tech’s weighting of 24.2% now was only seen for a few months at the very tail end of the Dot Com boom.  It didn’t reach 24.2% until November 1999.  At that point, the Tech Bubble only had four months to go before the epic crash occurred.

We know times are different now, but we definitely get a little uneasy when we see one sector taking up basically a quarter of the entire market.  It’s not healthy in our view.

Below is a look at the 40 largest companies in the S&P 500.  Today has been a big day for the largest companies in the world.  They’re all trading higher on the back of strong earnings reports from Alphabet (GOOGL), Microsoft (MSFT), and Amazon (AMZN).

Apple (AAPL) remains in the lead as the largest public company in the world by more than $100 billion in market cap, but GOOGL is now worth $724 billion — larger than any company not named Apple has ever been.

The 3rd, 4th, and 5th largest companies in the S&P are now all worth more than $500 billion as well.

So far in 2017, the five largest companies — all Tech related names — have added close to a trillion in market cap.  The remaining 495 stocks in the S&P 500 have added roughly 2 trillion.  This means the five largest stocks have accounted for a third of the 2017 gains in market cap for the entire S&P 500.