Key ideas from Ben Carlson

• Small caps have outperformed large caps by 13% since July when Fed signaled accommodative policy - Matt Bartolini
• Only 31% of active managers beat their benchmark last year with average underperformance of 200 basis points
• S&P 500 dividend yield at 1.12% is near historic lows, making equities poor income-producing assets
• 76% of non-US equity markets beat the US in 2024, the largest hit rate since 2009
• Mag 7 companies show vastly different growth rates: Nvidia at 69% earnings growth vs Microsoft at 22%
• US equity ETFs received 74% of flows despite representing 80% market share, showing relative underperformance
• Fed funds rate would be most telling data point for 2025 market direction - Bartolini
• Scale principles suggest natural limits exist for how large companies can grow before structural failure