Extreme concentration in stock market wealth creation
The discussion highlighted that a tiny minority of stocks generate the entirety of net market wealth, while the vast majority underperform.
The argument
Citing Bessembinder's research, the speakers noted that only 4% of stocks created 100% of net wealth from 1926 to 2018, and 71% of individual stocks fail to match the market return over rolling 10-year periods. This extreme skewness underscores the importance of a rigorous elimination process to filter out the underperforming 96%.
Hear it yourself
"your ground. Yeah. I love it. Yeah. Okay. Yeah. Yeah. And, you know, it's gonna be transformational. But, you know, at the end of the day, you know, for a lot of these companies, they they can use the same technology. And, you know, the incumbents have a lot of lot of power that Oh, I I have a lot of thought I have a lot of thought. I very much agree with that. I have a lot of thoughts I have a lot of thoughts on that. Let's let's put a pin in that, though. Yeah. I don't wanna do the show before the show. Alrighty."
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