The Arrogance of Investors

It is not only near impossible to beat the market, but difficult to just keep up with it.

1. ) The math is working against you. 2/3 of stocks underperform the index, half of the stocks are losers during their lifetime. -The Capital Distribution
2. ) 40% of stocks have a catastrophic decline(>70%) that they never recover from-JP Morgan Study
3. ) Only 4% of mutual fund managers will beat the S&P500. You have a better chance of hitting in black jack with two face cards(8%). Robert Arnott of Research Affiliates.
4. ) Of the managers who have beaten the index. Only 1/200(0.5%) of managers beat the index consistently by 3% or more a year. -Mohnish Pabrai.
5. ) Over the past few decades, listed companies on exchanges decreased from 8000 to 3500. The number of high IQ eyeballs focused on them has skyrocketed. -Mohnish Pabrai
6. “It’s been a frenzy of activity in the investment field. Almost everybody smart is sucked into finance by the money. I don’t welcome it at all. I don’t think we want the whole world trying to get rich outsmarting the rest of the world in marketable securities.” Munger 2020
7. ) Investors who say they are wrong more than 1/3 of the time
   -Pabrai
   -Dalio
   -Templeton
   -Rachon
   -Motley Fool
   -Buffett(on whole owned businesses per Pabrai)

It takes hubris for an investor to continue to be an active investor after being introduced to these statistics. The audacity for them to think that they are the top 5% that can bring more value to their own/others portfolio than an index is large. Make no mistake, I am one of them. But being aware of these stats keep me grounded with humility and gives me a sense of anxiety that forces me to be more prepared, cautious and careful with my equity selection. I hope it brings value to you as well.