WSJ What’s News - The Buried $150 Billion Bet Inside the Top 20 U.S. Stocks

Episode Date: August 2, 2026

This week, we’re bringing you an episode of WSJ’s Take On the Week. Host Telis Demos and guest host Spencer Jakab, investing columnist and writer of the Markets A.M. newsletter, are joined by Kaitlin Hendrix, asset allocation research director at Dimensional Fund Advisors, to decode investors’ surging interest in private markets. They break down how investors may already have exposure in their investment portfolios to private companies like Anthropic, Stripe and Flipkart, through holdings in companies like Alphabet's Google, Amazon and Nvidia. Hendrix explains why your public index fund might already provide the diversification you’re looking for, without the high fees. Plus, Jakab explains the way that big tech’s private company investments are boosting earnings to near-unprecedented levels.  To watch the video version of this episode, visit our WSJ Podcasts YouTube channel or the video page of WSJ.com Sign up for the WSJ’s free What’s News newsletter. Further Reading:  Earnings Forecasts Are on Steroids For more coverage of the markets and your investments, head to WSJ.com, WSJ’s Heard on The Street Column, and WSJ’s Live Markets blog. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hey, what's news listeners. It's Sunday, August 2nd. I'm Luke Vargas for the Wall Street Journal, and this is What's News Sunday, the show where we tackled the big questions about the biggest stories in the news. High risk, high reward. That is the promise of access to private markets. SpaceX set off a massive IPO wave earlier this summer, and OpenAI and Anthropic are gearing up to go public later this year, but they've built up a lot of market value while still, being privately held. New marketplaces have made it easier for everyday investors to grab shares of private companies and big asset managers are getting into the game too. But what if you've already got exposure and you just don't know it? This week, we're serving up an episode of WSJ's take on the week as host Telestimos dives into the $150 billion private markets bet

that's inside America's biggest companies and whether that might offer the diversification you're looking for. And if you like what you hear, listen and subscribe to WSJ's Take On the Week wherever you get your podcasts. Hi, everyone. I'm Tellis Demos. Welcome to another episode of WSJ's Take On the Week. We've got another special episode. We've been doing a lot of special episodes lately. It's summertime, you know, so you've got to mix it up. And so I'm joined today by Spencer Jacob. You've heard his voice on WSJ podcast many times. Spencer, welcome. Hey, thanks for having me. For those who don't know, Spencer,

Well, Spencer was my editor on Heard on the Street for a long time. And now Spencer writes our morning markets a.m. newsletter. So what is your title officially these days? A newsletter guy. Newsletter guy. Okay. Head newsletter guy in charge. Yeah.

It's still free, by the way, for anyone listening. Just Google Markets AM and you can get it. It's a fantastic read. I do. I do. If you're not already getting it, you absolutely should. And so today we wanted to talk about the reason. I brought Spencer in is because he wrote something really interesting lately about the role that

private markets are playing in what's going on in the public markets. And I also came across some really interesting research on this topic from our guest, Caitlin Hendrix. Caitlin, hello. Hi, thanks for having me. Caitlin is the asset allocation research director at Dimensional Fund Advisors. And I know in this show we've been talking a lot lately about the IPO market. And looking at companies that recently transitioned from the private market to the public market, such as SpaceX, for example, right? And so looking at SpaceX and what's happened to it, it's now trading actually below its IPO price as we're talking now. So it went up a bunch. Now it's back down. And so, you know, you might wonder, like, well, who made money in SpaceX, right? Because even if you'd

bought it in the IPO, you wouldn't have. Well, if you'd bought it way before it went public, when it was a tiny private company, when it was still just sort of a germ of an idea, and you had somehow gotten your hands on some stock, well, you'd probably still be making money, right? Somebody, I mean, it's a trillion-dollar company. Somebody made money there, right? And so all of this talk of the IPO markets maybe begs the question of whether or not we should be looking at, actually, these companies way sooner in the private markets. And there's no shortage of people these days who will urge you to invest in the private markets. There are funds that focus on that. So I wanted to dive a little deeper into that topic. And like I said, Spencer had been writing about it.

And Caitlin, the thing that I came across that you wrote, that, that jumped out of me was about private market exposure in the public markets. I thought this was a really interesting way to look at it. So tell me about what you were writing about. Yeah, it's hard to unpack, but we looked at the 20 largest U.S. companies, which account, by the way, for 40% of the market cap in the U.S. And we said these companies have exposure to a lot of private companies. So you think about trying to get in early. Alphabet, Amazon, and Vida, all. have multi-billion dollar stakes in Anthropic. So that direct investment is a way that everyday investors who are buying those large public companies can have this indirect exposure to those private companies.

And so we dug into the accounting statements. We looked through all the 10Ks for these 20 companies, and we found about $100 to $150 billion of direct investment in private companies. And so that's one way that investors can have that exposure. So what's an example of that? What's an example of like a big public company that plays VC essentially, right? Yes. And buys stakes in private companies. Yes.

So Anthropic is a big one. But then on top of that 100. Who owns Anthropic? Like what big public? Amazon, Alphabet, Microsoft, Nvidia. So a lot of these major names hold these stakes in Anthropic. So when I have my S&P 500 index fund, which is over in there, well, appropriately indexed, but very heavily weighted toward these companies, I'm getting that exposure as well.

Right. Exactly. And that's not the only way. So a lot of these companies as well have what's called a corporate venture capital or CVC. And that is a true private equity arm fully owned by the public company. So Google has one, Microsoft has one, Nvidia has one. Eli Lilly, it's not just the tech companies. You know, you see it in healthcare as well. And those biotech startups and stuff new medical technologies. And these are, Googles, for example, is a $10 billion private equity show. fully owned by Google. It has hundreds of portfolio companies. Stripe is one that stood out to me. You know, we use Stripe all the time when we do payment processing, owned by Google's venture capital arm, owned by Google, in my broad market exposure. There's one more way, too, on top of direct investment, CVC, there's subsidiaries. So Alphabet, another example, owns one of its subsidiaries owns Flipkart, the Indian e-commerce company. So all of this... And these are also the hottest names of private markets. These are the ones that everybody wants in on.

Exactly, exactly. And so I think when we're walking around saying, well, how can I get in early? We actually have a lot of exposure to these companies. And what's so surprising to me is what people will pay, they don't realize that, but then they'll pay a lot for exposure to these hot private companies. I mean, there are some funds out there that trade at double or three times or even 10 times. times in some cases, the net asset value. Or there are other funds out there that, you know, that don't trade exactly that way, but they charge you really, really rich fees. Whereas I can

buy, and I'm sure, Dimensionals, I don't know what your expense ratio is, but I know you have competitive, yes. Competitive, yes. Competitive broad funds, I think of like SPY or VOO that allow me just, you know, with one click to buy the S&P 500. It's 0.03%. And I'm getting exposure to all those things. And then if those companies are ever spun out, and not even just tech companies. I think about McDonald's, Chipotle, which turned into a huge success. You know, you got that for being a McDonald's shareholder. And it, you know, it did for many years way outperform McDonald's stock. But you got that just by owning that stock and by owning, you know, an index fund.

Yeah, I love that point because those frictions are so real. The fees on top of fees, the illiquidity, just the access issue. It can be really difficult. and just so opaque, not to mention the tax issues and the operational headache. So I think that's a really good point. And what scale are we talking about here? Like if you own, you know, some of those names, what percentage of your portfolio would you then, if you kind of think about that on that basis, what percentage of your portfolio is then invested in private companies when you own, you know,

Nvidia and alphabet and stuff like that? Yeah, it's not gigantic. It's maybe, you know, on the math. magnitude of around 1%. So it's small, and it's very hard to measure because we measure those direct investments by looking at financial statements. It's really hard to measure the CVC valuations, the subsidiaries, those accounting financials are integrated with, consolidated with the parent company. So around 1% knowing that it could be an underestimate because we can't really see all the numbers. So it is small.

where private assets are maybe, you know, eight or nine percent of the global market. But it is, it is meaningful? And is this a new thing? Or is this something that you've kind of always gotten with your exposure to the largest companies? Like how much of the returns of public companies over the years have been driven by, you know, the stakes that they might take in new ventures and things? I think it's been around a long time. And I think we talk about it because of the open AI, SpaceX's of the world. that are so hot right now. But when I think about it, so I'm up from Austin, you know, oil and gas is so big, I think about a company like Exxon. And we know that these types of large oil and gas companies often buy the mom and pops in their horizontal and their vertical. This has been going on forever. There's huge industries around it. So I think it's really always been there. It's probably just now that there's a lot more sensational voices saying, wait, but how can I get in on it?

And sensational is kind of the word, right? I mean, because you have people. who want to be let behind the enveloped rope. They know that these are investments that previously only the wealthy and well-connected could get access to. And now I can too. Now this fund is offering me access. And they don't think about how much it's costing them or how concentrated their bets are. Whereas if they own the whole stock market, they own bets in lots of companies they haven't

heard of this. Some of them can turn it into real winners. Many of them will turn it to losers. But, I mean, you know, it's not as concentrated. but there's also a kind of pointy-headed academic reason for it. And, I mean, I'm just not, no offense. But, I mean, you're a very sophisticated person. I mean, there's diversification is a good thing, right?

If you could own more businesses in more countries, doing more different things, that is generally good for you. It's like the last free launch and finances, right? So are people missing out by, for example, these proposals to allow targeted funds and things like that to own a little bit of a, private equity. Is that really important? Is it really necessary? I think diversification is a huge issue because I often think of it as that only free lunch in investing, so important. And like you were talking about earlier, it's pretty easy these days to get access to every publicly listed U.S. stock or international stock or emerging market stock. If you want to add private market exposure, maybe you can add a handful of companies or one fund or one investment. It's almost

impossible to have access to a really broad range of the full private asset universe. And so you wind up suffering from some of the idiosyncratic risks of a particular manager, a particular fund or sector. And that can be a risk that we don't have to take. You know, why do you want to take that? Right. And they just want follow up there. Then people say like, no, I mean, some people are just they have stars in their eyes, right? And they're like, I want a piece of SpaceX. It's the future or anthropic or whatever. But other people have. have a pretty rational sounding explanation. We're like, well, you want to own as many things.

But then you're like, well, tell me about your portfolio. Do you have a lot of international stock funds? I happen to own one-dimensional fund, not an advertisement for you guys. It's of some Japan fund, you know, in my IRA. And, you know, it seems like it's done pretty well. But I mean, but a lot of people then, they're very U.S.-centric. No, no, no, all the actions in the U.S., all the big tech innovations are in the U.S. Well, the U.S. is already like two-thirds, approximately of the broad.

world index and most people are 80 to 90 or even 100% in the U.S. So like one hand you're saying, I want to diversify, but then what about Europe or Japan or emerging markets? Just a little sprinkling. I mean, that would help you. Right. And there's great reasons to overweight your home market. You know, one can just be a preference. It helps me stay in my seat if I look more like my home market. One can be frictions like taxes. But there's a huge opportunity set globally. You can invest in 45 countries, most of our global funds do. And that can really provide those benefits

because while the U.S. over the last decade has been great, the decade before that, it was not. And so, you know, it's not always going to be this case. And it sounds like you guys are saying that if you're going to diversify, there are cheaper ways to do it. Right. Then, like you guys said, there are so many frictions and costs associated with, and it's difficult to get a broad spectrum of private company exposure

in your portfolio. I'm sure there are ways, but they're not cheap. And so you're saying, you know, Spencer, to your point, you know, a Europe index fund is going to be a lot cheaper and a nice diversifier before you get to, oh, I want to own, you know, this bleeding

edge, you know, technology company. Right. And I mean, you know, I'll write about it in the newsletter and then, you know, I get a lot of emails, you know, and I answer them anything, you know, that's a question, you know, and we'll say, well, why would I want, you know, I'd be taking currency risk and this kind of risk like, yeah, but it's in a different currency. I mean, look at

last year, right? The U.S. is actually one of the, it was one of the worst, did well, but it was one of the worst performing major markets in the world. You know, many other markets surpassed it. I mean, you don't get a lot of years like that, but I mean, you get the good with the bad. You know, you, that's called diversification. Obviously, you can, the U.S. is such a huge economy and big U.S. companies are so international, right, that you're already getting a lot of it just by owning U.S. companies, but you're definitely helping yourself by buying a bit of that, which is cheap and easy and one click away as opposed to paying up for one of these funds where who knows what will happen and who knows what will happen if you really need liquidity too with certain of these funds.

I want to come back to this return point, but we should also take a quick break. And when we come back, I do want to ask you, Spencer, about something you were writing about recently, about the impact of these private companies on the earnings of the companies that we all. know and love and have staked our retirement through the invidias and alphabets of the world. So we're going to take a quick break and come back for more with Caitlin Hendricks and Spencer Jacob. Welcome back. So Spencer, you in the Market's AM newsletter, which is free and tremendous, there you go,

there's the only free luncheon investing in the newsletter. Right. Don't say that's free. She for the diversification. You wrote about how these stakes that we're talking about, you know, the stakes that we're talking about, you know, the pretty, you know, the meaningful numbers that are invested in private companies through these big public companies. So we've been talking about IPOs and we know the valuations of these companies have grown. That's had like a pretty meaningful effect on the

earnings of some of those leading S&P 500 companies, right? Spencer, you wrote about this. Tell us what jumped out of you about that. Right. So if anyone listening has invested in Berkshire Hathaway, for example, you know, they'll say, just ignore these earnings because they own stakes in all these companies and they go up, they go down. And accounting rules. Every quarter, they'll have to say, oh, the value of this business went up, but that's just what the market did. Right.

And they own public companies, too, but they also own. But those things will change. Accounting rules. But even if you own a private company, if you own a private company and you didn't contribute any money to it, but someone else did at a much higher valuation, which is happening constantly these days with anything AI related, then its value is marked higher. And you're not talking small companies. I mean, these AI companies are trillion-dollar companies almost or some more than a trillion dollars.

So if you own a meaningful stake, Amazon, Nvidia, those are a couple of recent examples, then it's material to their quarterly earnings. If it all gets reported in a quarter. And to the extent that in the first quarter, about 12% of the net profit of the entire SMP 500 was made up of just these companies being revalued. There's no cash coming into them. but it shows up. And this quarter, we haven't had until this company's report yet, but it's likely to be two or even three times as high because you've had more of these revaluation events. And so what that does is it's sort of a self-fulfilling prophecy where people look at Nvidia.

They look at Amazon and they say, man, look at their profits. Well, if they're doing that well, then Anthropic must be knocking it out of the park. And, you know, even sophisticated people imagine or can justify when it comes to the IPO and they actually get liquidity of a higher valuation for those companies. And so it's not real money yet because you're talking about small fundraisings that, you know, that result in a very big bump in the total value, you know. Well, Caitlin, what's the right way to think about these earnings as an investor? Yeah, I think it's so interesting because I've read some of this in your newsletter. And I think unpacking that as sort of peeling back, pulling the curtain back on some of that. And I think it for me really enforces how important it is to have a market valuation and how powerful public equity markets are.

And if we look at SpaceX, for example, all those valuations that would happen with these small fundraising rounds and how credible are they. You know, what do I take from that as an investor? Now it's publicly traded. And now we see the market, you know, turning over in SpaceX every day, lots of. of volume going on. And now I feel as an investor that I can trust that price a lot more and I see it changing in real time. And so I think it reinforces that power of public markets. And so as an investor, I love accessing public markets. It's like every market participant who buys and sells, it's like all that information goes into the stock price and I can see it. It's like they all work

for me, but they don't know it. And I can I can use that information. And Spencer's the market appropriately valuing the earnings and these? I mean, one point you made was that it looks like the way you were kind of, you know, looking at some of the forward estimates and the multiples on those for the S&P 500, is that maybe investors were treating some of these kind of windfall gains as sort of permanent earnings. And you think they might be making a mistake doing that? Yes, yes, because it is, first of all, it's not cash. It's just a paper gain. You know, you, yeah, And then people do they haven't actually sold these stakes yet. They've not converted them to cash.

Right. But if you look at the CCP of it or not to be alarmist, but I mean, if you look at the earnings growth this year is off the charts, including or not including that, but especially including that for an expansion. I mean, it's the kind of growth that you typically would see coming out of a recession, coming out of a crisis, coming out of maybe not COVID. COVID was like totally supercharged. But, I mean, you tend to see rapid earnings growth like that after something bad. happened. Nothing other than Liberation Day, which was just a blip, nothing bad happened, nothing cratered the earnings. We're not coming out of a recession. We're not coming out of a financial crisis.

Not at all. And so corporate profit margins in the S&P 500 with or without that are very high. They're at or near a record. But if you look at, you take the bottom up forecast. I mean, you know, strategists will be a little bit more cautious because they actually look at the, they think about they're not missing the forest for the trees. But individual analysts are looking at their little sector, their six or seven or ten companies that they're looking at, and collectively they're saying that this very rapid growth is not only going to accelerate towards the end of the year, but also continue next year and the year after that. So you would basically have margins that record on top of record margins, which is probably highly unlikely.

There are reasons why corporate margins you can't compare it to the 1990s or the 1960s or whatever. You know, corporate America is different. Different kinds of companies have different profit margins. That's understood. You know, a retailer and an oil and gas company and a metal bashing company and a metal bashing company and a company that makes, you know, chips with 80% gross margins, different kinds of businesses. But within reason, and you're not having renewed turnover in the market to the extent that like a whole new, you know, galactic space travel, whatever, you know, there's there are limits to these things and you're pretty close to the limits. So those extrapolations are they're, I can confidently say they're unrealistic. I want to take another quick break. And when we

come back, I want to talk about, I don't know, it sounds like there's a case to be made for private markets given where public markets are. So I want to get more on that. I know Caitlin's done some research on that. So more on that when we come back. All right, welcome back. So what I was referring to there before the break, Caitlin, was that you did a couple of years ago, and I think You're still actively updating it, right? A very big survey of the returns from private assets. I think you looked across private equity and private credit, right? Thousands of different funds.

That's right. We looked at about 6,000 funds over the past four years. Well, and so what Spencer's saying about, you know, how the market maybe has gotten over, it skis a bit, the public market. I don't know. To me, that maybe makes the case for why the private market, which is not marked daily in the stock market. and maybe doesn't suffer from as much of a, you know, kind of boom and bust cycle in the pricing. Is there a role for private markets in a portfolio speaking, you know, as an asset allocator?

So when we looked at this question, why do people turn to private assets? We think there's two main reasons. One is because they think there's better performance. There's some premium that people are missing out on. And the other is diversification. So two things we've touched on today. And those are the questions we saw to answer. So with all this data, we said, well, let's look at performance first.

Now, measuring the performance of private assets can be tricky because obviously the prices are not reported every day. They're not trading in liquid markets. They're often lagged. They're often smooth. So we have to do some statistical techniques to correct for some of that. So we did a lot of that work. And then we compare these private asset returns to public market indexes. And what you see on the private equity side is some outperformance versus something like an S&P 500 over the long run.

But our venture capital firms, is S&P 500 the right benchmark? You know, we often see they're smaller, they're growthier. So when you start comparing them to small cap indices, you start to see some underperformance. You start to see it's a bit more of a wash. So private credit very similar. You see a little outperformance compared to a credit index. but anecdotally, private credit is a lot more like high yield, and you see underperformance versus a high yield index.

And Caitlin, if I were to take a – because it's more like microcap almost, right? The typical size of a company that's in one of those portfolios, and I applied a little bit of leverage to it, then my results would be a bit different, right? I mean, sometimes I'd lose, but if I just, you know, had some margin or had some whatever, which is kind of what these guys are doing, they're gearing up these companies, what would my results look like in microcap or in small cap? Yeah, these results are robust to leverage. So if we think about correcting for some of the leverage on the private side, we would still get similar results.

And the statistical techniques we used account for some of that. So it's robust to the leverage question. And the other element is the diversification piece. Are the private market returns fully explained by public market factors that we already know about, like the betas of the world? What we found is that – Meaning that, like, if the economy's doing well, these companies do well, right? And that explains that type of thing? We know there are certain factors that tell us about differences in stock returns.

We know small caps tend to outperform large caps. Some risk associated there. We know stocks that have a lower relative price tend to outperform those with a high relative price. So this is just grounded in years of theoretical empirical research. So do those factors tell us about private markets? And what we've found is there's actually some unexplained variation in the private market returns. So what I mean by that is the public market factors do not fully capture all the private market returns, which would tell us maybe there is a diversification benefit.

But then we need to come back to our question about how many private assets are you holding. This tells me private assets as an asset class. We'll add some diversification benefits. It's not saying that if you own one private credit fund or one private equity vintage that you're getting that exposure. So there's major caveats with that piece. So the results were interesting, but, you know, I don't think they really push in any one direction. But to me, it feels like you're not missing out. There isn't some big premium on the table.

And stepping back from that, I mean, this is difficult to capture. But, I mean, you talk to people who were in private equity 15 or 20 years ago. ago and you could walk up to someone who owned a, you know, dog food factory, say, hey, we'll, we'll pay you five times earnings for your dog food factory. And the dog food factory in her is like, you will, really? And they sold it. And so now there's much more of a, I mean, the historical returns probably are great because they got some, some good deals, right? Today, it seems like every business I interact with that isn't publicly owned is owned by private equity, the veterinarian and the HVAC and the whatever. They're all been rolled up into these things. things and they know exactly what it's worth. And anyone who owns a business like that who hasn't sold has been approached multiple times. And so I wonder how good the returns will be in the next 15 years compared to the last 15 just because they got good deals. People didn't know the game yet. Yeah. Yeah. I agree. Well, and Caitlin, your research also found, you know, what I thought was interesting, which is like a wide range. You know, you said that the average funds, public market

equivalent is between 0.81x, meaning like they did 81% as well, all the way to 1.13x or 113% or 113% as well. So, you know, you got to make sure you're picking the 113%, not the 81%. Yes, this dispersion is so critically important when it comes down to this idea that I can't buy the market in the private asset space the way I can in public. I can't buy the market, so I have to pick a fund. I have to pick a manager. And we found very wide dispersion. in outcomes. And everyone's like, well, no problem. I'll pick the 113. I don't need the 81. But when we look at persistence in manager performance, that's something that our data precluded us from doing, but there's some academic studies on it. And you don't see much persistence either. So the same manager doesn't keep doing well every time. Sometimes they do well, sometimes they don't. Exactly. And then those that maybe are, have some sort of secret sauce, very hard to get access as well. That's a huge piece too. It's the large. institutional pension plans of the world versus the retail, you know, smaller allocation pieces

that they're looking for. And potentially that's changing, right? We know that the alternative asset managers are looking to the world of individual investors through Spencer, you mentioned it earlier, retirement accounts, maybe target date funds. So perhaps there will be more index-ish type products available in the future. But as far as, wow, am I missing out on SpaceX, right? Like the ones that really grab your attention. You're saying, A, you're getting some of that already in your public portfolio, and B, chasing specific private investments is, you know, it's the same.

You're just a stock picker. Yeah, exactly, exactly. I just wanted to real quick nerd out on something you mentioned before, which is like talking about how to measure these returns. Because you wrote some really interesting stuff, and we talked earlier about this. A lot of times you'll see for a private fund, they will give you something called an IRR, an internal rate of return. Right? Your study, though, looked at something different, which was a TVPI, which I'm about to mess up the analogy, or the acronym. But that is like a multiple of the money that you put in.

Tell us about why you think that's the right measure and why IRR can be misleading. Because I know that's a number that a lot of people are going to encounter when they think about private investments. Yes. So, the example I like to use is if you buy a house. So I bought a house for $500,000. and 10 years later, I sold it for a million dollars. If that's all that happened, you made 100%, you made double your money, 2x, pretty straightforward. But now, say, you bought it for 500,000.

A year later, you decided you didn't want to live there, you started renting it out. Now you start earning some income. And then a couple years later, you do some capital improvements. You put some money into the house. Say this kind of back and forth happens a few more times. Maybe you refinance it. Now if I put in 500,000, you're going to. and I get out a million, I didn't actually earn 100% because there's been a lot more capital moving

in and out in between. This is what the IRA tries to solve for, but it doesn't give you the actual return on how much you put in and how much you got out. The TVPI is that total value to paid in capital. That would say, okay, I paid 500K. I paid this much for capital improvements. I got a million out. I also got this in income. So it takes all the money you got over what you put in. So that's really helpful because it's so straightforward, but then you lose the time value of money. So there's caveats to both of these approaches. And IRR, I think the hardest thing is it's just not really a digestible number. You can't, if you wanted to compute it for that house, you would say, okay, for year one, I had 500K, then year two when I rented it out, what was that valuation?

So here's the return over that year. Then I did my capital improvements. What's my return over that year? and you'd compound them together, it starts to lose some intuition. And it's not the same as the net return you take home, for example, in a public market. So you can't look at, so the IRA of this fund is 15%. Okay, but the S&P over that same period of time did 11%. Gee, that's an easy choice.

You're saying, like, don't just like use that as an apples to apples number. Exactly, exactly. And the money multiple is a helpful framework. You lose some of the time value of money, but then you do free yourselves from some of the difficulties in interpretation. I also understand that one of the appeals of private equity, private credit, does not really matter to me or you, right, which is that the values change very infrequently, right? And so, you know, it's kind of rudely been called volatility-wobring, right?

I mean, that, you know, you basically, the Calpers or whoever or some big pension fund is like, oh, look, this looks really good because we look at our risk-adjusted return. and since the price hardly ever moves or moves kind of by appointment, the return actually looks more attractive, but that doesn't really matter. It doesn't matter to me. What matters to me is how much I have when I am going to retire from the Wall Street Journal, not how much the thing moved around as long as I can stomach that. And hiding the volatility does not help me. I mean, it's, you know, maybe it'll keep me from panicking and selling or something because people do tend to on bad days for the stock market, you know, unwisely transact and sell where they should just kind of lose

their password, right? But it's really helpful to people not like you, not individuals, right? Yeah, yeah, I see that. And I think a lot of it is education. And we know for long-term investors, we're going to have these moments of volatility. You know, Liberation Day is a great example, because we saw this market tank. And then you woke up, if you went to sleep on April 1st and woke up on April 30th, you wouldn't have known. And I think it's kind of education around these types of events that can maybe help us deal with some of those behavioral biases. But agree, for an investor, if this is really what I'm going to retire on, it's more important to me that I understand how much is there and not that I just kind of smooth out the ride artificially.

All right, this has been a great conversation. I know we could keep talking about this, but we've got to wrap it up. Spencer, thanks for coming downstairs with me. You're very welcome. And Caitlin, thanks for joining us. Thanks for the time. And that's everything you need to know to take on your week. This show is produced by Alexis

Moore and Michael LaValle with production support from Anthony Bansy. Michael LaValle is our sound designer and also wrote our theme music. Aisha Al-Muslim is our development producer and Chris Zinsley is our deputy editor. For even more, head to WSJ.com. I'm Telestimos.

Until next time.