Own the 10 Biggest

Everybody says the giants are too big to keep winning. For 15.0 years, they kept winning anyway.

The rule. On the first trading day of each January, buy the 10 largest S&P 500 companies by market capitalization, equal weighted (10% each). Hold for the year, then rebalance. Market cap approximated as price x shares outstanding.

What actually happened.

• $10,000 became $121,112. The same $10,000 in S&P 500 (SPY) became $84,528. This strategy beat the benchmark by $36,584.
• Compounded at 18.1% a year vs 15.3% for the benchmark.
• Best year: 2023 (+39%). Worst year: 2022 (-23%). This is not a smooth ride.

The catch. At its worst, this strategy fell -27% from a prior peak — shallower than the benchmark's -34%. Would you have held through that? Most people don't. That's the whole game.

The takeaway. It worked here — but "it worked in the past" is the most expensive sentence in investing. The edge is real only if it survives costs, taxes, and the drawdown above. Show your work, then decide.

Holding right now (2014-01-02): AAPL, AMZN, BRK-B, BUD, CVX, GOOGL, JNJ, MSFT, WMT, XOM.