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Away from the discussion of the last 5 years being the years of LLM and AI boom and those mega caps exposed that hype driving the SP500, you didn’t list Europe’

• mikysco 2y ago
  Novo's rise is due to the proliferation of its new blockbuster weight-loss drug, semaglutide (aka Ozempic)
• em500 2y ago
  Yeah, I didn't do a full blown analysis, just went trough wikipedia's top 10 biochemicals by revenue (Novo Nordisk was no.14) and picked 5 years since that's the longest 1-click option from Google Finance to get a consistent time span. If you didn't predict Novo Nordisk's hit weight loss drug ahead of time, but just held a big portfolio of large pharmas, the returns seem pretty disappointing to me. Or put differently, if you have a lot of extra money to invest today, would you significantly overweight big pharma based on what we learned from this article?
  • pavlov 2y ago
    Isn’t this why index funds exist? For an individual investor who wants unopinionated exposure to “Big Pharma” it’s hard to buy more than, say, the ten largest stocks as in your example. They’d probably also focus on American stocks only since European are typically harder to buy. And then they miss out on Novo Nordisk. But an index fund that buys (for example) the top 100 global companies in this vertical would have benefited from the rise of Novo. If you had invested one million in a fund that held Novo at only a 2% weighing five years ago, there’s now a 100k gain from that stock alone. That makes up for a lot of middling big caps, and you didn’t have to actively pick Novo or any other stock.