Tag Archives: ai

08.27.26
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Deja Vu All Over Again? Just Saying!

By: Russ Kamp, CEO, Ryan ALM, Inc.

Yogi Berra, the great Yankee catcher, but also a NY Mets player/coach in 1965, is credited with the saying it’s “Deja Vu all over again”, which he supposedly uttered back in 1961. Are we potentially witnessing in 2026, with AI investments soaring and equity valuations that may be stretched, a replay to what transpired in March 2000? Now, I’ve heard many arguments that today’s technology companies aren’t your fathers’ or even your grandfathers’ but anytime I hear the phrase “this time is different”, I want to run and hide.

Let’s explore. At the peak of the dot-com bubble in March 2000, Information Technology represented approximately 35% of the capitalization-weighted S&P 500. That level of concentration within the S&P 500 was deemed extraordinary at that time. Remember when Cisco Systems was the largest stock in the S&P 500 index? What transpired from March 2000 to October 2002, proved incredibly painful to those investors that believed that “this time was different”. Unfortunately, it wasn’t! The result was a significant reduction in the weight of the technology sector within the S&P 500 from 2000-2002 by an incredible 21.7%. The technology bubble burst took down Tech’s exposure from roughly one-third of the index to about 13% by the 2002 bear-market bottom.

PeriodTechnology weight in S&P 500
1995~10%
March 2000~34.5%
Oct. 2002~12.8%

That leads to today’s discussion comparing March 2000’s Technology exposure versus August 2026’s broader “technology-related” weight when you include Meta, both classes of Alphabet, Amazon, and Tesla. As you can see by the information displayed below, roughly 50% of the S&P 500’s weight is now in technology-related entities.

ComponentS&P 500 weight
Official Information Technology37.15%
Amazon3.84%
Alphabet Class A3.06%
Alphabet Class C2.45%
Meta Platforms1.83%
Tesla1.55%
Broader technology exposure49.88%

In other words, today’s exposure is about 15.4 percentage points higher in technology than at the peak of the dot-com bubble.

However, the exposure to Technology and AI is not limited to the S&P 500 (equities), as massive investment in data centers (real estate) done through significant debt financing (fixed income) might be subjecting a pension plan’s entire asset allocation to significant risks.

Is your portfolio prepared for the next significant market correction?

08.04.26
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Really, WSJ?

By: Russ Kamp, CEO, Ryan ALM, Inc.

The WSJ’s editorial board recently published an article based on a new report from Equable Institute highlighting AI’s positive contribution to public pension plans (public workers) and the taxpayers that fund the pensions. This assessment is based on the fact that the AI “market boom” specifically and NASDAQ’s performance generally have continued to generate outsized returns despite so much global uncertainty.

The market’s strong performance has boosted the funded ratios of government pension funds, which Equable estimates hit 85% nationwide this year—the highest level since 2007. Equable estimates that roughly 8% to 10% of government pension funds are benefiting from their investments in about 50 publicly traded AI-related companies. Their analysis doesn’t include investments in privately managed funds that own stakes in private AI companies like OpenAI and Anthropic. 

Equable highlighted the fact that while AI is yielding positive returns for pension funds, the magnitude of the outperformance also bears a warning. They claim that nearly 32% of every $ going into a pension plan is paid by the employers (aka taxpayer), and that should the AI bubble burst, it could lead to significantly higher taxpayer contributions. The WSJ stated that some AI company valuations may be stretched in the current boom and could be in for a correction. They also mentioned that government policies that seek to slow AI including robot taxes and data-center moratoriums—could stifle the boom. 

If that correction becomes reality, taxpayers would be stuck paying much bigger pension bills, which could force worker layoffs as happened after the 2008-09 Great Financial Crisis. They claim that it would be better for governments to move workers to 401(k)-style plans that reduce the risk for taxpayers and give public workers a direct stake in the success of AI and other companies. 

So let me get this straight: the WSJ editorial board is concerned that a potential AI correction might just happen because of stretched valuations leading to greater taxpayer funded contributions, so to minimize that potential risk, it would be better to shutter public pension plans and force public sector workers into DC-like programs. If they are concerned that valuations are stretched perhaps leading to a correction, why would they want public workers to have a direct stake in the “success” of AI and other companies?

I’m sorry, have the folks at the Journal not seen the median account balances for those in DC-styled plans? Do they understand that asking workers – public or private – to fund, manage, and then disburse a “retirement” benefit with little disposable income, no investment acumen, and no crystal ball to help with longevity issues is just silly? Do they not also realize that the public sector workers (roughly 20 million) pay taxes, too. They also buy things which leads to economic activity and job growth. Do we really want our Senior population sitting on the economic sidelines because they can no longer afford to participate? We’ve already messed up retirement for a good portion of the private sector. Enough is enough!