Bessembinder’s paper is of interest to anyone who has worried about how the craze for artificial intelligence mostly confined gains in the S&P 500 to half a dozen companies that account for virtually all of this year’s advance. Treating that basic pattern as unusual is a mistake, his work suggests. In fact, there’s reason to believe the situation is permanent and likely to intensify.
For people looking on anxiously as stock wealth converges in an oligarchy of high-tech juggernauts, some perspective: It’s nothing new.
That’s the upshot of six years of research by Hendrik Bessembinder, whose work shows how unevenly the stock market’s rewards are apportioned over time. The Arizona State University finance professor is back with a new study, Shareholder Wealth Enhancement, 1926 to 2022, saying that not only do bizarrely few stocks make up the lion’s share of returns in the last century, but that the pool of superstar companies may be shrinking.
