"The Architects of AI" are this year's TIME Person of the Year. We asked Google's Gemini, "Can you list when the front cover of TIME featuring Person of the Year has turned out to be a curse?" Gemini responded as follows: "While TIME Magazine maintains that "Person of the Year" is a measure of influence (for better or worse) rather than an endorsement, the distinction is often lost on the public. Consequently, there is a recurring pattern known as the "TIME Cover Curse"—where recipients of the title suffer assassinated reputations, political downfalls, or literal death shortly after the issue hits newsstands."
For example, Jeff Bezos was named Person of the Year at the end of 1999, at the peak of the dot-com bubble. Within 18 months, the bubble burst, and Amazon's stock lost over 90% of its value (though he obviously recovered in the long run).
Here's another example: Elon Musk capped a massive year for Tesla and SpaceX by winning the title at the end of 2021. The following year was disastrous for him: he bought Twitter (now X), his personal reputation took a severe hit, and he became the first person in history to lose $200 billion in net worth.
We have been warned.
The AI trade is turning into a Game of Thrones. In the past, the Magnificent-7 had their own kingdoms surrounded by big moats. They each had their unique monopolies. But now they are competing with one another in the AI race, threatening one another's kingdoms. That's why we recommended underweighting the Magnificent-7 in Sunday's QT, anticipating that the bull market will broaden to the S&P 493 in 2026.
We also wrote that it no longer makes much sense for us to continue overweighting the Information Technology and Communication Services sectors in an S&P 500 portfolio, as they now account for a record 45.2% of the index's total market capitalization (chart). That's already too much concentration in just two of the 11 S&P 500 sectors, even though they account for a record 38.6% of the index's earnings.
