Rowan says 100% of returns this year came from 10 stocks at 50 PE, which few would actively buy.
“A 100% of our returns this year are from 10 stocks which constitute 35% of the S and P that traded an average PE of 50.”
Rowan argues extreme valuations in top stocks reflected money flows, not fundamentals.
“We had one stock which was larger than the market cap of every stock exchange in the world other than Japan. That was not necessarily fundamentals. That was money flow.”
Rowan warns that ten companies dominate the S&P, joking the U.S. retirement system is essentially levered to NVIDIA.
“We have 10 companies that dominate the S and P. We've essentially, as I sometimes joke, we've levered the entirety of the retirement system of The U. S. To NVIDIA.”