The On-Line Encyclopedia of Integer Sequences (OEIS) (oeis.org)
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The Unfashionable Art of Learning Things (medium.com)
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ETFs now hold more than $3.1T worth of just top US companies
88 GodelNumbering 89 8/31/2025, 1:31:07 AM signalbloom.ai ↗
Example: in smaller countries there are multiple cellphone providers that are essentially identical. They don't compete, really.
When a business starts harvesting the economies of scale it also becomes easier to compete against everyone. Then you get the political externalities (nobody gets fired for buying IBM) and real anti-competitive behavior (supplier exclusivity, bribes, tying, discounts, etc).
It's practically a natural law.
Rogers, Bell, and Telus are the three companies that own or acquire nearly every internet/mobile/tv property in the entire country. They all offer the exact same plans at the exact same prices, moving in lockstep almost down to the hour when new price or benefit surfaces.
Similarly banking is dominated by the big 5 who don’t really compete as far as the average customer is concerned.
In many regions groceries are dominated by two companies, while nationally the entire market basically consists of five or so.
And because Canadian pension plans and ETFs are so heavily invested in these select few companies, they trudge along with virtually no incentive to upset the status quo because the government finds it easier to oversee oligopolies than allow competition to benefit the populace.
Cellular technology between providers is basically identical now. The nightmare that all cellular providers dreaded, becoming a dumb data pipeline, has happened. Value add services are dead across the board.
Telus has a profit margin of around 4%, what sort of innovation are you expecting with those financials?
Forgive my cynicism for thinking that the cost of acquisitions and other financial shenanigans is factored into what's called the profit margin for those businesses.
Get fucking real. Which one did you work for?
But they got commoditized. They are a utility provider now, they can't charge an arm and a leg for tethering or photos in messages.
Their profit margins are garbage and they have to spend a shit ton of money to deploy new tech to maintain those shit margins.
The writing has been on the wall for decades that this was coming，which is why they acted like such dicks to try and keep it from happening.
Some other slower moving industries are more conducive to lasting monopolies.
It also applies to the classic Silicon Valley model. You operate at a loss in the beginning because you are hyper focused on growing nodes and connections. Once you have sufficient size your whole business structure changes, being able to leverage the network effects (including your competitor's now lack of network). A good example of a network effect is social media. No one joins a platform because no one is there. No one leaves a platform, even if they hate it, because everyone is there. In a world where we've made scale so critical, natural monopolies are going to proliferate.
While I acknowledge your point of view, a Tesla taking in $38B of government subsidy or a google/apple getting special lenient legal treatment is not laissez-faire.
Re fitness - if you define it in terms of survival, you get a circular argument. Is a brainworm that controls the host (e.g. to get some subsidies) the fittest? Based on your example, you think it's not. So how do you define fitness?
What I am saying is different - incumbent has an advantage, it already adapted at least once to it's environment. That gives it an edge over something that is adapting for the first time. Of course that doesn't mean incumbent cannot fail at readaptation or the new thing cannot win. The favor from gods has limits.
(Incumbent also has a way to mobilize resources in a way that can be difficult for a newcomer. As was also pointed out, applying biological theories to businesses can be tricky, so this is perhaps more relevant.)
> Is a brainworm that controls the host (e.g. to get some subsidies) the fittest? Based on your example, you think it's not. So how do you define fitness?
The parent comment says (with my emphasis):
>> a Tesla taking in $38B of government subsidy or a google/apple getting special lenient legal treatment is not laissez-faire.
As you note, there is something of an assumption here that the claim being responded to is that all incumbent-friendly policies are laissez-faire.
But there does not appear to be a claim that successfully seeking large subsidies isn't a type of corporate fitness.
Your original post is responding to a post critiquing incumbent-friendly policies that only emerged in the last few decades.
Your point that market economics alone can favor incumbents isn't wrong, but that's a non-sequitir response to the post you are responding to.
Market economics aren't the incumbent-friendly policies that only emerged in the last few decades. The artificial mechanisms instituted through purchased political influence are.
Actually nature favours selfish reproduction. Take care not to be distracted by "fitness" when looking at evolution. Fitness is only defined by reproductive success.
Businesses compete for resources. But they don't reproduce, so comparing nature to businesses is often pointless.
Like invasive lionfish, which have no natural enemies in the Florida Keys.
Big tech has destroyed the open web.
Big tech killed the bookstore.
Big tech is now destroying Hollywood.
Big tech is becoming your grocery store and primary care.
They're guardians that keep small companies from growing big. They can buy them out or threaten to pour billions into out-competing.
They're growing into markets they never should have been in, then snuffing out the incumbents.
They're making it impossible for new businesses to enter after them. (You try to build a smartphone. There can be only two.)
Now they're putting price pressure on employees. They're limiting the upside for entrepreneurs and VC firms. They have all the cards, and they tax us and behave like capricious gods.
I'm a capitalist. I think competition is good. But what we have right now isn't a fair playing field.
Big tech needs to be broken up to restore the forest to growth. Thankfully YC and a16z are starting to feel the same way and are issuing statements about this rampant, wanton monopolization.
(I would also say that capitalism is more than a competition of firms, in fact, private ownership of capital is by its nature anti-competitive for citizens.)
Governments around the world have let these industries do whatever they want with almost zero oversight and almost zero repercussions for anything. For decades. These companies and industries do whatever they want. Its only in the last few years that a couple of governments have finally started to push back a teeny tiny bit.
> Governments around the world have let these industries do whatever they want with almost zero oversight and almost zero repercussions for anything. For decades. These companies and industries do whatever they want. Its only in the last few years that a couple of governments have finally start push back a teeny tiny bit.
Are you claiming that the tech industry wasn't bound by intellectual property laws until recently?
these and surrounding “disruptive” industries have been behaving as if they’re in a laissez-faire environment for a couple of decades at this point. there are certainly strong arguments which would fairly argue “Look at the havoc they have wreaked on us. Like a small child who can’t control themselves, clearly some of them are incapable of self-regulation. it’s time to reign some of them in, and harshly. they’re behaving like uncontrollable spoiled and bratty children setting our house on fire. time for a spanking.” in too many instances those arguments would be on solid ground and tough to earnestly argue they’re wrong.
We've been asleep at the wheel for the better part of a quarter century. We need to dust the rule book off and get back to work.
now you are overreaching, and just spouting non-sense
Why is Amazon able to buy franchises like Lord of the Rings, advertise them for free on the side of its delivery vans and packaging, then offer the content completely for free to its mail order subscribers? That's dumping and competes with the non-AWS subsidized offerings of non-tech film studios.
Why did Amazon, Apple, and Netflix offshore production to the UK, Eastern Europe, and Asia when the US has infrastructure and subsidies? Almost everyone I know in IATSE is out of work and contemplating leaving the industry for good.
It's a pretty thorough destruction or assimilation if you ask me.
> Why is Amazon gobbling up failing studios on the cheap?
For their back catalogue. The audiences are after familiarity ("more of the same") and nostalgia. The studios in turn are terrified of taking risks, which is why nearly everything they release has been a sequel, prequel, reboot, or in-universe spinoff for more than 15 years. Buying up a studio gives access and control over their massive quantity of pre-chewed dough to feed their cookie cutter productions.
In this Amazon behaves like a PE entity: buy up for cheap, roll up what they can, reduce quality, and milk for as much money as possible before tossing the empty (& possibly toxic) husk aside.
> Why did Amazon, Apple, and Netflix offshore production to the UK, Eastern Europe, and Asia when the US has infrastructure and subsidies?
They have been following what the studios have been doing for decades. Even in 1990's a good chunk of US productions were often filmed in Canada. (To lower production costs, of course.) UK was known for some of their film studios even before then, so made a good early target when Canada started to become too costly and you needed to move elsewhere.
You can see where this is going. We're already seeing more productions filmed and located in/near China[ß]. As the costs there will eventually creep up too, expect to see locations shift to places like Indonesia, Pakistan and South-Eastern Africa.
ß: Part of China's visibility and increased footprint on films is due to a clear political drive. The CCP has set up structures where they strongly encourage their industry arm to fund film and TV/streaming production elsewhere in the world, buying up influence and dictating how Chinese get portrayed in the scripts.
The bailouts aren’t/weren’t problems. Failing to hold big companies and their leaders accountable for risks they took not paying off in a way that doesn’t disrupt low level people is.
The US does not practice laissez-faire capitalism; we practice a pernicious state corporatism where losses get socialized, gains are privatized, where the trillion dollar companies pay lower tax rates than the mom and pop shops, where the federal government spends more resources spying on their own citizens than they do spying on Russia or China, where members of Congress are for sale when they're not insider trading, but where you will get abducted by plainclothes DHS agents and get deported (even with a valid, legal residency) if you so much as dare to publicly criticize Israel or have the wrong skin color while standing outside of a Home Depot.
There's nothing "natural" about any of this.
Mutual funds don't generally make pre-IPO investments regardless of whether those funds are actively or passively managed.
No. There's still plenty of active money doing price discovery; you can't attribute this market concentration to the rise of passive. (And this is self-correcting; as the share of active money shrinks, the reward to active investors for price discovery grows.)
The market is concentrated because that's where active money thinks the future profit is.
Meanwhile, check out the recent Abivax pop. Drug trial results sent shares to the moon, outperforming the S&P500.
Stock picking is so...damn...hard.
However: between now and then they're likely underperforming as you point out. And when it happens most people who believe themselves to be ziggers will have chosen the wrong zig candidate.
I really really worry about the ETF world, but to do anything else puts me at even higher risk.
The pension reallocations? Blackrock? Bitcoin?
There is a ton of money being siphoned off with zero place to put it. When sv collapsed why does Roku park half a billion dollars in a bank account. Roku has 8th of Mazda’s net worth parked in a bank account… there is unchecked capitalization for the sake of the share price, this money is doing nothing except buying up competition.
The real problem is a feedback loop: large companies get cheaper capital → they can afford to hoard cash and make defensive acquisitions → this reduces competition and innovation → which paradoxically makes them even "safer" investments → reinforcing their cost-of-capital advantage.
Meanwhile, the "missing middle" gets squeezed from both ends. Small companies can access some capital through VC/growth equity, but medium enterprises ($10M-$1B revenue) face a brutal gap. They're too big for most VCs, too small for institutional debt markets, and banks are increasingly consolidated and risk-averse.
(I am so personally familiar with the missing middle in my day job)
This isn't just about market efficiency - it's about market structure. When a streaming company parks $500M in bank accounts instead of investing in content or technology, that's not rational capital allocation. It's defensive positioning enabled by cheap capital and regulatory capture. There are many many lazy companies sitting on a cash machine structure with no decent ideas on how to grow.
Some potential fixes: - Tax policy that penalizes excessive cash hoarding; eliminating the tax deduction on interest would encourage companies to hold less cash by making cash more expansive
- Regulatory limits on horizontal acquisitions above certain market share thresholds
- Public development banks focused on the missing middle (like Germany's KfW)
- Capital gains tax advantages for investments held in companies under certain size thresholds
The irony is that this concentration might ultimately hurt passive investors too - less competition means less innovation and slower long-term growth across the entire economy.
Nearly every startup I've talked to recently (last year or so) has been cash flow positive after just series A (or sometimes after just a seed round!)
Companies are pursuing smart business strategies and prioritizing healthy rates of growth over "hire everyone we can and figure out how to make a profit later". I'm seeing a lot of very focused businesses that are meeting customers demand right away and solving real problems. They aren't billion dollar problems, but they are profitable problems to solve. I wonder how the startup ecosystem will change if VCs start seeing 60% of companies making a healthy profit after a couple years, vs the historical trend of waiting a decade and hoping 1 company strikes it big. 60% of companies growing 10-20x ROI seems ... Not bad?
One problem of large mega corps is they don't even bother to go after new ideas that aren't multi-billion dollars markets. It used to be Microsoft would make a bunch of senior engineers filthy rich, they'd go boot strap a new company, and if the idea took off, Microsoft would aquire them again. Some people in the 90s/early 2000s pulled that off multiple times!
The defensive acquisitions can work on domains with gravity effects to a degree, but those are domains are far from being the total market.
Unrealistic, that strategy has no history of success. MariaDB tried... still wimpy.
> The defensive acquisitions can work on domains with gravity effects to a degree, but those are domains are far from being the total market.
Not so. Market size and inertia, connections, red tape and political weight are always present, fundamental forces of "gravity". They are the total market, at least the part of it that matters.
More importantly, even if your strategy of "feeding the machine for personal gain" did work, it amounts only to feeding the machine without changing its nature or direction. That strategy can benefit few individuals but it can't fix any of the issues discussed here.
Because this is how you get a late Soviet central committee.
I did not write the parent of your comment but I went back to re-read it and I didn't see any hints of central planning. In fact, the parent proposed no solution, it only pointed out a process of continued monopolization which, if unchecked, would lead to something resembling the monopoly of the late Soviet central committee over their economy.
In a sense, your comment inverted the meaning of the parent.
Defined contribution plans didn’t spring out of the ether on their own. They were a reaction to evident rampant risks and deficiencies of defined benefit plans even after many failed attempts at reducing that risk via regulation.
Also, what about the increased risk of corruption leading to underfunded DB pensions? Which is apparently near certain, given that pretty much every defined benefit pension fund across the US is underfunded.
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/s
1. You earn interest at the Fed’s rate. So basically why would you keep your money with Chase earning 0.25% maybe when you can earn easily 10x that. So everyone pretty much moves to this new system.
2. This eliminated speculation. The banks can no longer turn $1 into $30 by repeatedly borrowing and lending. But it is important to slowly grow the money supply. So the Fed can just no questions asked deposit a predefined sum of money every month into everyone’s account.
3. Your transactions are free and guaranteed.
But of course this would cut out a whole lot of banks and other financial institutions out of the loop and so it will never happen.
Banks will offer low yield on cash if you don't go looking for better yield, but it's easy enough to find good yield: money market accounts. E.g., VMFXX throws off 4.21%, which is reasonably close to 4.34.
(I don't agree with the general thrust of GP's argument, just clarifying on some neutral facts.)
And the odds of picking the right managed etf over index fund?
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This is, of course, changing the goal post because a portfolio with 90% S&P 500 and 10% cash will also appear "superior risk-adjusted" than 100% S&P 500. Sharpe ratio is the most misunderstood metric invented by humanity.
US companies have great reporting. Every quarter you get a nice report with GAAP numbers. In Europe, for example, reporting is less frequent and murkier. Reports often don't even include standardized net earnings.
Top US companies like Microsoft, Google, Apple, Nvidia, Tesla, Meta, all have intelligent, driven, forward looking CEOs. Most other companies have CEOs asleep at the wheel. Can anyone name a smaller public company or a public company outside the US with a highly driven, forward looking CEO?
If you're in any of the main ETFs or index funds you're getting really cheap access to what's basically the same list of stocks you'd get with direct indexing. If you're trying to get equal-weighting of an index there's ETFs for that too, but that would mean you're betting more on companies without the ability to benefit from significant hegemony and the madding crowd of index fund influx, which seems to be where most of the growth comes from these days.
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