Market Transformation - The S&P 500 has transitioned from a discounting mechanism for future cash flows used by the wealthy to a new pension scheme for the US, a shift that began with the introduction of 401(k) plans [1] - The S&P 500 is now effectively a public good, backed by Congress, the Executive branch, and the Federal Reserve [2] Valuation and Investment Strategy - Traditional valuation methods, such as a P/E ratio of 17, are no longer appropriate for the S&P 500 due to government backing and its role as a modern pension scheme [2] - The S&P 500 deserves a higher multiple, potentially in the 20s or even 30s, given its explicit and implicit government support and its fundamental backing of the bond market [2] - Analyzing markets using 20th-century principles is outdated and ineffective [3]