Dear Member,

It’s going to make new highs because it is rigged to make new highs. It is, by design, meant to hit all-time highs each and every decade we are alive. Will we have sharp pullbacks, corrections, and crashes? Yes, we will, and then we’ll go back to making new highs.

Since 1957 — when the S&P 500 was officially formed — only 86 companies still exist that were part of the original 500.

You see, a committee purges the index annually. Many of the 414 companies that were in that original 500 in 1957 filed bankruptcy, were taken over, or no longer met the criteria of the S&P 500 committee.

From 1957 to 2015, there have been over 1,000 companies in the index.

My point, of course, is that this is exactly why the S&P 500 will continue to make new highs. It’s because it is constantly in change, with growing and thriving businesses being included, and declining and failing businesses being taken out.

It’s why I hate the comparison of the S&P 500 with gold or silver; the ratio, in my opinion, is hogwash. It’s not a true apples-to-apples comparison, One of your measures is in a constant state of change, with an upside bias for the S&P. The same goes for any comparison or historical average… the fact is the S&P 500 looks nothing like it did 10, 20, or 30 years ago.

An important lesson for students of investing is that if you bought all of the S&P 500 companies included in 1957 — despite the bankruptcies and problems with the businesses that were eventually dropped — You’d still have made more money than an investor who stuck with the current model of a revised index.

This magnifies the reality of the power of buying and holding good businesses. Because even while losing your entire investment in some of the original 500 stocks, the good names – specifically the 87 that are still found in the index today — had large enough gains to beat the index. For more investment research, including our interviews with some of the best investors in the world, check back regularly to

Best Regards,

Daniel Ameduri