The big gets bigger, the expensive more expensive

THE world today is getting more unequal in every sense of the word. This year, because of Covid-19, the gap between the haves and the have-nots, between the big and small, has widened even more.

Let's look at the stock market performance in the US so far this year. As Ben Carlson wrote in his blog A Wealth of Common Sense this week; "Understanding the US stock market in 2020 is fairly easy - the bigger, more expensive companies are performing better than the smaller, less expensive companies. That's it. "There are 505 companies in the S&P 500 with a combined market cap of roughly US$29 trillion. As of Monday around noon est, the index is down 0.7 per cent for the year. Considering the market was down 34 per cent at the lows in March, this is a decent place to be. But the performance of the individual components of the market is all over the map and the borders for that map can be drawn neatly by company size."

In the table, you can see a clear correlation between the stocks' return and the company size.