A Record of Compounding Progress
Stock markets have demonstrated an extraordinary record of long-term growth, extending back nearly five centuries to Antwerp in 1531, home to the first organized exchange. The New York Stock Exchange traces its origins to 1792, when 24 brokers signed the Buttonwood Agreement beneath a tree on Wall Street.
The evidence of compounding is striking. Since its inception, the Dow Jones Industrial Average has increased by nearly 98,000%—turning a $100,000 investment into roughly $10 million today. IBM, which went public in 1915, had appreciated by 3,400,000% by its centennial in 2015—transforming $100,000 into $340 million. It has risen further still since then.
The natural question is: why do stock markets have such a consistent and powerful record of wealth creation?
What We Actually Own in a Stock
Many investors think of stocks as little more than pieces of paper to be bought and sold—abstract claims whose value rises or falls with quarterly earnings announcements. Did a company sell 250,000 units or 255,000 units? If the outcome misses expectations, its stock may decline 20% overnight.
Thousands of professionals devote their careers to forecasting such minutiae. Yet their accuracy is often fleeting, offering little more predictive power than fortune-telling. As Warren Buffett wrote in his 1992 shareholder letter: "We've long felt that the only value of stock forecasters is to make fortune tellers look good."
In truth, a stock is not a trading slip—it is an ownership interest in a real, operating business. More importantly, it represents a claim on the collective labor, knowledge, and ingenuity of everyone who has ever contributed to that business, past, present, and future.
Stocks as Claims on Human Ingenuity
Human beings have an unmatched record of innovation and progress. Every day, billions of people wake up to design, build, sell, market, and invent—each striving to improve their own lives and those of their families. From the factory floor to the executive suite, every role adds value. As shareholders, we own a piece of that value—and by extension, a share in humanity's progress.
Even more compelling, ownership in public companies provides exposure to some of the most brilliant minds of our era: scientists, engineers, physicians, entrepreneurs, and technologists. Holding shares in Apple, Microsoft, Tesla, Amazon, or OpenAI means holding fractional ownership in the ideas of leaders like Steve Jobs, Bill Gates, Elon Musk, Jeff Bezos, Sam Altman—and those who will follow them.
The choice becomes clear: would you rather sell your "piece of paper" because quarterly earnings fell 2% short of estimates, or own a lasting claim on the world's most innovative thinkers and builders?
Market Noise vs. Market Truth
Of course, stock prices do not always reflect intrinsic value. One of the defining characteristics of public markets is their near-constant availability, with trading open almost every weekday of the year. This frequently amplifies human behavioral biases.
Periods of panic are inevitable. Fear can convince investors that entire industries face extinction, that workers will not return to their jobs, or that leading innovators have suddenly lost the ability to generate ideas.
Yet these dislocations are opportunities. They allow disciplined investors to acquire long-term claims on future growth at temporarily discounted prices. While short-term outcomes are unpredictable, history strongly suggests that people will continue to work, innovate, and create. If those assumptions were ever to fail, the implications would extend well beyond markets.
Why We Stay Long
When we view stocks not as lottery tickets but as ownership in human talent and ambition, short-term noise recedes. Wars, recessions, interest rate cycles, currency crises, and pandemics have all disrupted markets—yet none have derailed humanity's capacity to progress. Each generation has emerged with higher living standards, greater technological achievement, and ultimately, higher asset values.
As long as investors have the time horizon to avoid selling, equities remain the most effective vehicle for wealth creation. At their core, they are claims on human progress—and that progress has a nearly unblemished record.