Bessemer-Binder diversification thesis is too broad
The famous Bessemer-Binder study showing that very few stocks drive all market returns should not discourage active stock picking of smaller compounders.
The argument
The hosts argued that while the study is statistically true at the largest scale, it ignores many smaller companies (e.g., $5B to $50B) that deliver 5x to 50x returns through growth or acquisition without ever needing to become trillion-dollar giants.
Hear it yourself
"So the idea is very few stocks are responsible for all the gains in the market, but there are a lot of 10 x, 15 x, 20 x, 50 x, 100 x companies that never reach the scale of being the top five comp top 50 company."
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