Own one stock: the biggest company in the S&P 500. Check every three months. If a different company has been on top for two checks in a row, sell what you hold and buy that one. Otherwise do nothing, which is what almost every check comes to. Every figure below assumes you put in $10,000 at the start and reinvested the dividends.
| Check | Who is #1 | Action | Why |
|---|---|---|---|
| Q1 | Apple | HOLD | Apple was #1 last quarter too. Nothing to do. |
| Q2 | Microsoft | WAIT | New name at the top. You still own Apple. One quarter is not enough. |
| Q3 | Microsoft | SWITCH | Two checks in a row. Sell Apple, put everything into Microsoft, traded at the next session’s open rather than the close that produced the signal. |
| Q4 | Amazon | WAIT | New name again. You still own Microsoft. |
| Q5 | Microsoft | HOLD | Amazon did not stay #1, so it never earned the switch. You still own Microsoft, and you never traded on its one good quarter. |
Everything above this line is a reconstruction: what the rule would have returned, worked out afterwards from historical prices. This part is not. It is one real Roth IRA, following the rule forward from the day it was opened, priced at the last close on record. It will look nothing like the twenty-year figures for a long time, and that is the honest version of what starting today looks like.
Every quarter, check who holds the #1 spot in the S&P 500. If a new company has held it for two quarters running, sell everything and buy that one. Otherwise, hold.
Not investment advice. Sandpone is a public record of a mechanical rule set, published for discussion and curiosity. Nothing here is a recommendation to buy or sell any security.
Backtested, not traded, except where it says otherwise. The twenty-year record, the chart, the simulator and every headline figure are reconstructed from historical data with the benefit of hindsight about which company held the top spot. No money was invested on those terms. The only exception is the "Real money" section, which is one actual Roth IRA opened after this site existed and priced from daily closes; it is labelled as such and its result should not be read as the strategy's twenty-year record. Backtested returns are pre-tax and ignore commissions, spreads, and the capital gains due on every switch outside a sheltered account.
Provenance. Prices and dividends from Yahoo Finance; inflation from BLS series CUUR0000SA0; share counts for the leaderboard from SEC XBRL, which begins in 2009. Every figure is computed by ingest.py and leaderboard.py in the project repository and stored as fetched. The page renders those records and calculates nothing of its own. Nothing here is interpolated: a missing input renders as a gap.
What "#1" means here. The biggest company in the S&P 500, as the index itself ranks them: by float-adjusted market value, counting only the shares the public can actually buy. That number is not an opinion: it is read from the holdings file of iShares IVV, the fund that tracks the index, at each quarter end. Every switch on this page was confirmed at both of the two quarter ends that triggered it, and both are re-checkable with index_leader.py in the project repository.
The check is the quarter-end close; the trade is the next open. Whoever ranks first is only known once the market has shut, so a fill at that close is not a price anyone could have obtained. Both orders are therefore filled at the next session’s official open. One sells the old holding, one buys the new, both at the first price available after the signal. The old position keeps its overnight move and the new one is bought a day later, with the execution date stored on the record beside the quarter that triggered it. Yahoo publishes an adjusted close but no adjusted open, so the open is put on the same basis by applying that session’s own adjustment factor, which is one number per day covering splits and dividends alike.
Why the record starts in September 2006. This is the earliest quarter where the index's own ranking can be read rather than computed: every row is the highest-weight holding in iShares IVV, the fund that tracks the S&P 500, from BlackRock's published holdings file. Two quarters (2017 Q1 and Q2) have no snapshot; a quarter with no reading can never count toward a confirmation, so a gap can delay a switch but never cause one.
The record can go further back, and doing so reverses the conclusion. Two extensions exist in the project repository. 1994–2006 is computed from 10-K cover-page share counts times the as-traded close, and agrees with IVV on all ten overlapping quarters. 1980–1994 is estimated, because no SEC filing exists before 1994. Share counts are carried backwards through splits, with a measured median error near 25% at fourteen years. Neither is published here, because neither is read from the index itself.
Start dates are not neutral, and this one is not either. Tested from every start year, this strategy trails the index from any start before 2002 and beats it from any start after. That is a fact about the last twenty years of mega-cap concentration, not a property of the rule. September 2006 was chosen because it is where the data changes character. It does flatter the result, though, and a 1994 start shows the strategy behind. Anyone quoting the figures above should know both numbers exist.
The two-quarter rule was chosen with hindsight. It was tested against eleven alternatives on this same twenty-year record and beat rotating-on-the-instant from all 58 possible starting quarters. But those 58 runs overlap and share a single market history, and the advantage rests largely on four bad switches avoided. That is evidence, not proof. The full comparison is backtest.py in the repository; run it and disagree.
Leaderboard coverage. The standings table ranks by full market cap within a fixed candidate list of large-cap index members, not all 500. Companies whose share count cannot be resolved from unsegmented SEC XBRL, as some multi-class issuers report only one class, are excluded outright rather than ranked on a partial count.