The weekly digest — 09.10.24
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 dismally 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 dividend from AbbVie next week. In 2013, AbbVie was spun out of Abbott Laboratories as a standalone company to focus on maximum payoff, heavily research-oriented pharmaceutical drug discoveries. Since then, it has become a prolific dividend machine; AbbVie has grown its dividend more than 5x while the appreciation in its stock market value has simultaneously outpaced Abbott. Notably, in the spinout, AbbVie received Humira, the world’s best-selling pharmaceutical drug with more than $25 billion in annual sales but with a caveat — Humira’s patent protection would end within 10 years. To its credit, AbbVie developed two blockbusters of its own, Rinvoq and Skyrizi, which have grown so fast they may together soon eclipse Humira’s peak revenues. With this impressive precedent, as well as a strong pharmaceutical development pipeline and the growth of its Allergan division (owner and developer of the Botox trademark) after a Covid contraction, the company is well positioned to enhance its stellar record as a public entity.
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.