[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  Chamath Palihapitiya [@chamath](/creator/twitter/chamath) on x 1.9M followers Created: 2024-12-28 23:09:59 UTC This needs to be fixed or it will end in disaster. Why? Average Americans buy S&P XXX index ETFs, in part, because Buffett told them to. They were told they would pay very little and get diversification in the XXX best companies on earth to ride out storms. But as concentrations rise in a very small percentage of those stocks, the risks don’t fall. They rise. If the indices don’t cap the max percentage of any one stock, you essentially are holding a direct bet on that ONE company. In this case, see that when you buy an index of XXX companies, you’re really buying XX companies with XXX others thrown in. If there is any market volatility, the lack of diversification could cause massive impairment. That’s ok if you’re a “professional” and that’s what you are betting on but most ETF buyers aren’t professional stock traders and they will be in for a rude awakening if this isn’t addressed. XXXXXXXXX engagements  **Related Topics** [market cap](/topic/market-cap) [stocks](/topic/stocks) [asset allocation](/topic/asset-allocation) [told](/topic/told) [rating agency](/topic/rating-agency) [$spy](/topic/$spy) [Post Link](https://x.com/chamath/status/1873144394100187263)
[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]
Chamath Palihapitiya @chamath on x 1.9M followers
Created: 2024-12-28 23:09:59 UTC
This needs to be fixed or it will end in disaster.
Why?
Average Americans buy S&P XXX index ETFs, in part, because Buffett told them to. They were told they would pay very little and get diversification in the XXX best companies on earth to ride out storms.
But as concentrations rise in a very small percentage of those stocks, the risks don’t fall. They rise. If the indices don’t cap the max percentage of any one stock, you essentially are holding a direct bet on that ONE company. In this case, see that when you buy an index of XXX companies, you’re really buying XX companies with XXX others thrown in.
If there is any market volatility, the lack of diversification could cause massive impairment.
That’s ok if you’re a “professional” and that’s what you are betting on but most ETF buyers aren’t professional stock traders and they will be in for a rude awakening if this isn’t addressed.
XXXXXXXXX engagements
Related Topics market cap stocks asset allocation told rating agency $spy