Clive Thompson argues that his 2026 ‘beat the benchmark’ portfolio is not broken; it is lagging price-wise because he deliberately removed expensive technology names after they became too stretched. He says the underlying businesses are still growing sales, profits, and EPS faster than the S&P 500, and he prefers that quality and valuation mix over chasing the mega-cap AI trade.
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Clive Thompson frames the video as a check-in on his annual “beat the benchmark” portfolio, asking whether the 2026 version is a disaster or a buying opportunity. His core argument is that the portfolio’s roughly -7% year-to-date performance is a price/sector-mix problem rather than a business-fundamentals problem: he says the holdings’ reported sales, operating profit, and EPS growth are strong, but the portfolio has been deprived of the technology names that have dominated index returns in 2026. He leans heavily on comparative operating data. He says the 40 companies in the portfolio increased turnover by 22.84% on average, operating profit by 24.81%, and EPS by 73.9%, with median revenue growth of 13.96%, median operating profit growth of 12.84%, and median EPS growth of 14.43%. …
Tactically, he is staying out of crowded tech and expects the current relative underperformance to persist while mega-cap/ETF flows dominate. The immediate risk is that the market keeps rewarding the same expensive leadership, leaving his portfolio behind.
Over the next few months, he expects fundamentals to matter more if his holdings keep posting strong earnings and revenue growth; that would support a rebound even without tech exposure. The view weakens if the market remains narrowly led and his non-tech names fail to re-rate.
His structural view is that disciplined valuation and balance-sheet quality should win across cycles, even if they lag in momentum-driven stretches. He is effectively arguing that avoiding overcrowded tech is a durable risk-control stance, not a short-term trade.
The 2026 Beat the Benchmark portfolio is underperforming because it excludes expensive technology stocks, not because the underlying companies have poor fundamentals.
The speaker shows that despite underlying earnings and sales growth beating the S&P 500 top 40, the portfolio is down 7% year to date because it lacks the AI/chip/tech stocks that are attracting all the index fund inflows.
The 40 stocks in the 2026 Beat the Benchmark portfolio have higher median revenue growth, operating profit growth, and EPS growth than the top 40 S&P 500 stocks.
Speaker provides specific median figures: 13.96% revenue growth vs 9.1% for S&P 500 top 40, 12.84% operating profit vs lower comparator, 14.43% EPS vs 12.58% for S&P 500 top 40.
The 2026 portfolio's companies are expected to grow earnings per share by more than 20%, exceeding the US stock market's expected EPS growth of under 20%.
Speaker cites Simply Wall Street forward-looking data comparing portfolio EPS growth forecast to the broader US market.
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