This whole idea that “it’s a stock picker’s market” has always made me laugh.
As opposed to what exactly?
When was it ever not a stock picker’s market?
We’re not trading one thing. We’re dealing with a market made up of thousands of individual stocks, all doing their own thing at any given time.
The S&P 500 has about 500 names. The Dow Jones Industrial Average has 30. The Russell 2000 has, well, 2000. That’s a lot of different bets.
And every single one of us, whether we admit it or not, is making one simple decision over and over again.
Buy something with the intention of selling it to someone else at a higher price later on.
That’s the whole game.
So if the outcome depends on what you own and when you own it, then you’re picking stocks.
Everybody is.
Some people just outsource the decision and pretend they’re not involved. But that doesn’t make it passive.
It just makes it someone else’s pick.
No Such Thing as Passive Investing
A lot of people still believe in this idea of “passive investing.”
You just buy the fund, “set it and forget it.” No decisions. No stock picking. No involvement.
That’s the pitch.
But that’s not how this works.
All you’re doing is handing the decisions to someone else. The activity doesn’t disappear. It just gets outsourced.
Whether it’s an index committee or a fund manager, someone is still deciding what gets in and what gets kicked out.
That’s “stock picking.”
And sometimes it’s not very good.
Look at the Dow. In 2020, after more than 90 years, they removed Exxon Mobil (XOM) and replaced it with Salesforce (CRM):
That wasn’t “passive.” That was an active decision.
They chose to take out one of only two energy names in the index right as energy was getting going.
And they replaced it with (gulp) a software stock?
That’s a stock pick. And it was a really bad one.
Same thing with the S&P 500. Plenty of “passive” investors in there.
Ask them about Super Micro Computer (SMCI) getting added in March 2024.
From the moment it went into the index, the stock fell apart. It’s already down about 75% since that decision.
Another active decision. Another stock pick. Just not yours.
That’s the part people miss. You didn’t avoid the decision. You just gave it to someone else and called it “passive.”
And this is where it starts to matter more.
Because if we accept that stock picking is always happening, whether we’re doing it ourselves or not, the only question left is how much it actually matters right now.
And the answer today is: more than usual.
Now More Than Ever
It’s always a stock picker’s market.
That part doesn’t change.
Some stocks go up. Some go down. If you’re in the right ones, you do well. If you’re not, you don’t.
But the degree to which that matters? That’s always changing.
There are environments where it feels like everything is moving together. Correlations spike. Volatility picks up. Stocks start behaving like one big trade.
When that happens, it’s harder to separate yourself from the crowd because everything is getting pushed around at the same time.
Then there are environments like this one.
Calmer conditions. Correlations breaking down. Stocks going their own way.
That’s when selection becomes the edge.
This is a 126-day rolling correlation (six months) just to smooth things out:
And you can see what’s happening: Stocks aren’t moving together.
That’s why you’re seeing new highs every day in some names, while others can’t get out of their own way. Same market. Completely different outcomes.
That’s opportunity.
And if you zoom out even further, it becomes even more obvious:
Now you’re looking at a rolling 252-day correlation, which represents a full year of data.
That line isn’t just drifting lower. It’s falling apart.
So yes, it’s always a stock picker’s market.
But right now, it’s really a stock picker’s market.
A lot of people don’t want to hear that. It’s easier to believe you can just hand it off, sit back, and let “the market” do the work.
But that’s not what’s happening.
At TrendLabs, we’re leaning into this.
We want the dispersion. We want the names that have nothing to do with the index. We want the stocks that can go up whether everything else does or not.
That’s the whole point.
If the correlation between what you own and the overall market is near zero, you’re not riding the tide.
You’re picking your spots.
And in this environment, that’s where the money is.
So no, this isn’t just a stock picker’s market.
It’s the kind of market where the stock pickers win the most.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs