The weekly digest — 12.02.25

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 Chevron (CVX) this week. In the 1860s, hordes of prospectors descended on California in search of ‘black gold’ or oil. A Chevron predecessor put California on the map as an oil-producing state. In 1876, oil well Pico No. 4 successfully struck oil, and was soon followed by the construction of California’s first pipeline, first refinery and first steel tanker — all built to ship crude to San Francisco. Ever the pioneer, Chevron later introduced its revolutionary sales mechanism: the world’s first ‘service station’ in Seattle. Given scale is the only true differentiator in big oil, Chevron has been an aggressive accumulator, acquiring Gulf Oil, Texaco and Unocal on its path to becoming number two in the US, with proven reserves around 10 billion oil-equivalent barrels. Scale begets significant rewards: Chevron’s 2024 earnings exceeded $17 billion. It has repurchased its shares in 17 of the last 21 years and increased its dividend more than 40 per cent since 2019. Plus, provided Brent oil stays above $60, Chevron anticipates it will more than double its free cash flow by 2027 to more than $20 billion, providing the proverbial fuel to continue its impressive dividend growth record, spanning 38 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.