Seven Stocks Are 41% of the S&P | John Davi on Building Portfolios Beyond the Mag 7 Bet

John Davi of Astoria Investment Management explains how he builds diversified portfolios in a tech dominated market. With Jack Forehand and Justin Carbonneau, Davi walks through an alternative approach. He also explains why he sees echoes of the 1970s in today's inflation, what he watches in credit markets for signs of stress in the AI buildout, and where real assets fit alongside stocks and bonds.

Topics covered:
- Why John Davi trimmed Astoria's equity overweight without trying to call a market top
- What the 10-year Treasury yield looks like relative to nominal economic growth
- How SPY and QQQ overlap, and what a conventional equal-weight index changes besides stock weights
- The question facing the Magnificent Seven: can earnings grow fast enough to justify AI spending?
- Where John Davi agrees with the passive investing feedback-loop argument and where it falls short
- What goes in the 20% when a 60/40 portfolio becomes 50% stocks, 30% bonds, and 20% diversifiers
- Why John Davi favors AI adopters and watches credit default swaps on the companies funding the buildout
- How Astoria screens for quality at a reasonable price using profitability, dividends, and valuation
- What trading floors taught John Davi about hedging before a drawdown

Chapters:
00:00 John Davi on earnings, rates, and trimming equity risk
05:05 Is the 10-year Treasury yield high relative to growth?
10:16 Seven stocks and the changing risk inside the S&P 500
14:33 Diversifying around SPY and QQQ
20:02 Equal stock weights without a big tech underweight
24:46 Passive flows, prices, and buying the dip
30:04 Higher rates, the 60/40 portfolio, and real assets
37:08 From AI builders to companies using AI
42:40 Credit spreads and cracks in the AI trade
47:34 Adding a quality screen to growth stocks
55:12 Why John Davi hedges and resists chasing past winners

Research discussed:
Rates Hit Multi-Decade Highs. Will Growth and Earnings Keep the Rally Going?
astoriaim.com/single-post/rates-hit-multi-deca…

Astoria Investment Management
astoriaim.com

Astoria on X
x.com/AstoriaAdvisors

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No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.