motherbird

Loss of Clarity on Chesapeake's Peak

As of Fridays close, the S&P 500 market cap weightings of energy and financials were 14.45% and 14.84% respectively.

November of 1980 was the all-time high of energy with a weighting of 29.24% of the S&P 500. Its interesting to note that that same month and year saw the all time low for financials with a weighting of 4.49% of the S&P 500. Their weightings moved in the opposite directions over the next 23-25 years with energy bottoming at 5.31% in 2003 and financials topping at roughly 25% in 2005. Thier weightings move opposite each other over 20 something year cycles and reach extremes at the turn of those cycles.

It appears to me there is much market cap yet to be destroyed in financials. Likewise energy's market cap weighting would have to double from here before it reaches its historical extremes.