Talking Billions with Bogumil Baranowski We Asked Chris Bloomstran Why He Won’t Own the S&P 500 At These Levels — And What He Does Instead
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Apr 24, 2026 
Chris Bloomstran, founder of Semper Augustus and value-focused investor known for detailed annual letters. He tackles extreme Mag-7 concentration and why owning the S&P 500 today is risky. He contrasts a secular valuation plateau with a peak. He questions AI capex returns, warns of hyperscaler overbuilding and hidden leverage, and parses what Berkshire’s cash says about opportunities.
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Secular Valuation Plateau Risks for Index Investors
- Chris Bloomstran calls the current market a secular valuation plateau, not a single peak, meaning high valuations can persist for years with muted expected returns for cap-weighted investors.
- He contrasts owning the broad market with buying individual businesses and stresses lower leverage and debt-light portfolios to manage macro risks.
Mag Seven Concentration Creates Fragility
- The Magnificent Seven now account for ~25% of S&P profits and ~12–13% of sales, trading at much higher multiples than the rest of the market.
- Their net margins and scale made them twice as profitable as the other 493 companies, but such concentration historically precedes disruption.
Don't Blindly Buy And Hold Famous Compounders
- Avoid assuming you can buy a compounder and hold forever; disruption and valuation compression frequently erase decades of expected returns.
- Actively trim expensive positions to buy cheaper ones and size positions by how wrong you might be.