Lead-Lag Live Consistently Not Stupid: Why Boring Compounders Win When Chaos Reigns
Mar 31, 2026
Seth Cogswell, investment manager and founder of Run, builds active equity strategies focused on contrarian, mid-cap quality names. He warns about concentration risk, private credit mark-to-model dangers, and liquidity mismatches. Expect crisp takes on why buying what others ignore can beat crowded indexes and how AI and market hype can mask real vulnerabilities.
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Concentration Creates Overcrowding Risk
- Market concentration creates real overcrowding risk when 10 stocks make up ~41% of the S&P 500.
- Seth Cogswell compares it to a packed theater with one exit: selling pressure would be concentrated and severe if liquidity is needed.
2008 Showed Illiquid Alts Force Public Fire Sales
- In 2008 institutions with high alt allocations sold public equities to raise cash, driving sharp market falls.
- Seth recounts that illiquid private allocations forced asset-to-liability mismatches and fire-sales in public markets.
Private Markets Magnify Liquidity Fragility
- The illiquid private market has ballooned since 2008 to roughly $13 trillion in private equity and private credit.
- Seth warns these assets are hard to access in a stress event, amplifying public-market strains because institutions can't raise cash from them.