By Porter Stansberry in the S&A Digest:

I normally take a bit of liberty on Friday's Digests... either to talk about investing strategies you should try (but probably won't) or about macro themes worth your attention. Today, however... I'd like to take a minute to comment on something I'm almost 100% sure won't interest you in the slightest: Me. I know the quickest way to ruin a party or lose a reader is start to talking about yourself... so I'll be brief. And there's something in it for you too, as you'll see...

This week brought two of the biggest endorsements of my entire career – recognition from both Richard Maybury and Dennis Gartman. In his eponymous letter, Gartman re-printed my entire "Why There Are No New Jobs" piece and followed it with this:

We don't like to lift whole cloth articles because we feel lazy when we do, but this time we had no choice but to do so for this is so truly spot on that it could only be lifted whole cloth. Though very tongue-in-cheek, there is real wisdom here. Would that the Left understood the lunacy of their philosophies... Mr. Stansberry is rather well known on the investment speaking circuit. He's a wise man; a good man and in this instance an imminently insightful man. Job growth? It is non-existent and so long as this Administration remains in power intact it will remain so... – Dennis Gartman.

I'd venture to guess that most of my readers – maybe even 90% of them – have never heard of either Gartman or Maybury. But these guys are the wise old men of the investment newsletter game. They are giants. As David Galland, managing director of Casey Research, said when he wrote to congratulate me: "Glad to hear about Maybury... if you can get past his filter, you have indeed arrived."

These men – along with Richard Russell, my friend Doug Casey, and my partner Bill Bonner – were the pioneers of our business model. They proved if you were smart enough (and had enough integrity), you could make a living purely as an analyst. You didn't have to bend over to bankers... or pander to advertisers... or become a peasant in the book publisher's feudal system. They staked out the territory where I make my living today – a place where ideas matter and what you write shapes the markets and the world around us. That's why you should know their names, read their letters, and take them seriously. That's why I'm grateful they've recognized my work. Lots of people in the publishing business have commented on our ability to market... but I care a lot more about getting recognition from people like Maybury and Gartman, guys who really only care about ideas.

Now... what's in all of this for you? Well, we've started an important new project at Stansberry Research. We began our business by competing against investment banks. We knew improving on their research wouldn't be difficult: Their real clients are the folks selling shares to the public, as the Wall Street research scandals of the early 2000s proved in spades. Over the last 11 years, we proved our independent research is vastly better, by any measure, than the stuff your broker might send you. The reason is simple: We're not paid to lie to you. We really can only do well financially if we get a renewal check.

Over the years, we've noticed another glaring defect in the market for ideas: the way advertising dollars impact editorial coverage. Every major newspaper in America swears there's a "Chinese Wall" between their ad sales department and their editorial department. But every thinking person knows that's total nonsense. My dad worked for many years as a newspaper reporter. He knew very well who was paying his salary – as does every reporter in the world.

Why was Stansberry Research the first publishing group to predict the inevitable bankruptcy of General Motors? It wasn't because we're the only financial journalists who can read a balance sheet. GM and GM dealers were typically the single largest advertisers at most newspapers and magazines in the United States. That might have had something to do with it, don't you think?

Likewise, on Wall Street, GM's bond issues were one of the largest income streams for investment banks in the 20 years leading up to their bankruptcy. You see no evil and you hear no evil when your income depends on it. In contrast, we only get paid if we bring you the best, most valuable ideas – we're looking for "evil" all of the time.

And that brings us to this bit of institutionalized stupidity: the S&P 500 Index and the Dow Jones Industrial Average. "S&P" is Standard and Poor's. It's a bond-rating agency. To popularize its name and make sure its clients' stocks were well known too, it began selling information on market prices to newspapers, magazines, and investment banks. Likewise, to popularize its newspaper (the Wall Street Journal) and ingratiate itself to the biggest buyers of advertising in America, Dow Jones began compiling the prices of the 30 largest industrial stocks and distributing the information to the media.

When you hear people say, "the market went up 3% yesterday," they're almost always talking about either the S&P 500 or the Dow Jones Industrial Average. But here's something important to understand: These indexes weren't designed to help you become wealthier. They were made and published to generate bond-ratings business and sell advertising.

What's wrong with the existing major indexes? Well, for starters the S&P 500 is market-cap weighted. That means the more expensive a stock becomes, the more weight it carries in the index. So if you're buying an S&P index fund, your money will end up in the most expensive stocks first.

That doesn't make any sense, does it? Just because a stocks is enormous and expensive doesn't mean it is a good business. (Think AIG, Citigroup, Enron, etc.) In fact, buying the most expensive stocks simply because they're expensive is the opposite of sensible investing.

The Dow Jones index makes even less sense, if that's possible. It is "price weighted." That is, stocks with a high nominal price carry the most weight in the index. That's just bizarre. As even amateur investors know, the nominal price of a single share is completely meaningless as a factor in determining the attractiveness of the investment.

We've said for years that anyone who buys an index fund based on either the S&P 500 or the Dow Jones Industrial Average is either stupid or insane. Those indexes weren't made for investors – they were made to benefit the companies who created and popularized them. (By the way, the SEC knows this very well too... but did nothing to stop the headlong rush into funds based on these indexes, funds that were marketed most notably by the Vanguard mutual-fund company.)

The sad thing is... buying a diversified portfolio of stocks is a good idea for novice equity investors. And you could have done very well over the last decade owning a broad basket of stocks – if you'd simply applied a logical approach in selecting real blue-chip companies and buying them when they were trading for sensible prices.

So... what if a group of experienced and knowledgeable analysts started from scratch to build a real blue-chip index of stocks? It would be a list of companies that have achieved a superior return on assets. It would be a group of companies that consistently put shareholders first by keeping expenses low and returning capital to investors in the form of cash dividends and share buybacks. We've taken on this task. And we're close to publishing the S&A 40. Here's the best part. We can prove to you our index is far, far superior to either the S&P 500 or the Dow Jones Industrial. And we can show you a simple system for knowing exactly when to buy the stocks in our index – and when to sell them. This is safe investing made simple. Look for our new Blue Chip Monitor soon.

Crux Note: The S&A Digest comes free with a subscription to Stansberry & Associates' flagship letter, Stansberry's Investment Advisory. To get access - and be among the first to learn about the Blue Chip Monitor - click here.

More from Porter Stansberry:

Porter Stansberry: "The entire system is going to collapse"

Porter Stansberry: This investment secret will change your life

Porter Stansberry: How I discovered the world's best money-making secret