The weekly digest — 05.02.25

A Winning Machine

What is more powerful than a 101-year-old winning machine? Since 1923, the S&P500 index has generated an annualised return of ~10.5%. For more than a century, it has:

• Beaten 99.9% of professional investors, who typically underperform the index annually by ~2-3%, with the gap widening over time.

• Proven its stellar compounding potential; $1 invested in the index in 1923 would be worth more than $13,000 today.

• Comprised of the bluest of the world’s blue-chip stocks, self-regulating and re-weighting these in line with their individual performances — eliminating user selection error.

• Always regained its previous highs, surviving the Great Depression, one World War and the Covid pandemic.

Weekly Digest

On a look-through basis, we will become entitled to our next dividend from Domino’s Pizza (DPZ) later this month. Founded in 1960, Domino’s established itself as an early mover in the nascent but expanding pizza sector, ultimately establishing itself as undisputed global leader in the low-cost, low-price segment. To do so, it utilised small footprint stores, located close to its customers, with a standardised, compact range of options easily understood by customers and employees alike. Early on, Domino’s recognised that convenience was a pivotal component of customer preference and accordingly became a delivery pioneer, further differentiating itself from competitors. A key Domino’s advantage was that its franchisees tend to have begun their Domino’s journey from within, typically as kitchen shift workers on the delivery scooter, resulting in an intimate knowledge of the business and informing long-established relationships between Domino’s and its franchisees. While, in the mid-2000s, Domino’s faced menu challenges, its successful restructuring has translated into exceptional dividend performance — above 20 per cent per annum compounded since 2010 — which has driven a parallel stock uplift exceeding 15x.

To Have and To Hold

The greatest threat to our investment success? Us. So, how do we get ourselves from outset to outcome? Over four years, we’ve collected more than four million data points that demonstrate how a particular methodological communication keeps investors on track. This email is part of a powerful anticipatory feedback loop that works as a bad-decision buffer. With our handholding, evidence shows investors are far more likely to hold onto their investments — long enough to enjoy their wins.