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Listened to the fantastic podcast between @patrick_oshag and @bgurley and got to thinking about the risk of incumbents being disrupted especially with VCs having estimated dry powder of ~450bn (up 3x since 2014). $SPX $RTY 
The largest US companies are busy returning cash to investors at a record pace. At a time when VCs have never had more money to throw at solving problems. The above chart shows the average cash and marketable securities balances of the constituents of the $SPX.
Returning cash has become such a priority that it has come at the expense of research and development. R&D expenses as a percentage of net sales have taken a step down since the GFC. $SPX
The recent bump up in r&d was probably due to the the repatriation of foreign profits and the Trump tax reform.
Even in absolute dollar terms r&d expenditure growth has slowed. This is all the more surprising given the makeup of the $SPX has shifted towards tech and healthcare companies which generally spend more on r&d than the average large US corporation.
The risk to incumbents has never been greater but their behaviour suggests otherwise. Maybe this explains why ‘expensive’ stocks are getting even more expensive relative to ‘cheap’ stocks. $SPX
Expensive stocks getting relatively more expensive can be seen with the growing differential between the trailing PE of the 75 & 25 percentile of $SPX constituents ranked by trailing PE
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