Thoughts on beating the S&P (for all)

There are many ways people try to outperform the S&P 500, but most are exclusive rather than inclusive.

For example, receiving allocations of highly sought-after IPO shares can produce outsized returns, but that opportunity is available to only a select few. It’s essentially a game of hot potato—someone benefits only because someone else buys at a higher price.

The more durable way to outperform the S&P is to find opportunities that are inclusive rather than exclusive. As an upstart, that means acquiring assets or businesses at low multiples—not high ones—where value creation comes from broad participation instead of privileged access.

Even buying and holding the S&P 500 for 20 years is not free. Beyond the initial valuation multiple you pay, there is also a carrying cost: the opportunity cost of having capital tied up for decades while waiting for compounding to work. The long-term returns may justify that cost for many investors, but it is still a cost that should be acknowledged.

The answer, however, is not to chase speculative assets such as memecoins or NFTs. While they may experience periods of rapid price appreciation, there is little historical precedent demonstrating that purely digital scarcity, by itself, has consistently produced enduring stores of value over very long periods. Digital scarcity may prove durable in some cases, but history provides a much shorter track record than it does for traditional asset classes.

Even legal tender has a tangible form, and many enduring stores of value throughout history have combined scarcity with either physical presence, productive utility, or institutional backing. Bitcoin presents an interesting case because its visual identity—the familiar coin symbol—is powerful conceptually, but that symbolism is not, by itself, proof that digital scarcity alone guarantees long-term value. Its long-run role as a store of value remains something markets continue to evaluate over time.

The advantage has to come from being clever, not deceptive. The best opportunities often appear deceptively inclusive: they look accessible to everyone, yet very few people recognize their true value or act on them. That is fundamentally different from exclusive opportunities, where the edge comes from privileged access rather than superior insight.