The weekly digest — 08.01.25

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 The Clorox Company (Clorox) later this month. Founded in Oakland, California by Scottish-American couple William and Annie Murray, Clorox was originally a single offering: Clorox liquid bleach. But Annie Murray recognised its multipurpose potential; she would go door-to-door promoting the product’s benefits as bleacher, germicide, cleanser and disinfectant. Consumers loved it. Bleach — specifically Clorox — earned an exalted wartime status for its dual abilities to disinfect wounds and purify water, simultaneously solidifying Clorox as a globally trusted brand. Its stranglehold on the bleach segment was so intense that even Procter & Gamble could not make inroads on Clorox’s share, ultimately choosing to buy the company outright. The combination of both companies was deemed a monopoly by the US Supreme Court and Clorox was demerged as a standalone public company in 1968. The Clorox universe has since expanded, with the company adding niches such as water filtration (Brita) and food wraps and rubbish bags (Glad). Perhaps unglamorous at first glance, these additions generate ultraglamorous gross margins of almost 50 per cent, which have helped power a dividend growth track record for 47 years and counting.

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.