Forty years ago, the ten largest companies in the S&P 500 accounted for 10.5% of the Index’s total capitalization. Twenty years ago, that number was just over 20%. As I write, it’s 40%. Pause for a moment if you will, and just take that in. It does not seem to me to require further comment.

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We are now most of the way through a 17th year (counting from March 2009) in which the Index has compounded at 16%. Granted, this is still off the pace of August 1982 through March 2000 – nearly 18 years at a blazing 19.3%. Note the critical similarity, however: both these epic runs were born out of a decade of stagnation in which the real returns of equities were negative.

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As the equity market has risen, so have economic, fiscal, political and geopolitical risks in the United States and around the world. Still I think it can be fairly said that – as in that earlier epic run – nothing has risen further or faster than the public’s enthusiasm for speculative assets of every sort, and stocks in particular.