The Odds Are Against Us
"My friends at Longboard Asset Management completed a study called The Capitalism Distribution that examined stock returns from the top 3000 stocks from 1983-2007. They found that:
-39% of stocks were unprofitable investments.
-19% of stocks lost at least 75% of their value.
-64% of stocks underperformed the index.
-25% of stocks were responsible for all the market’s gains.
Simply picking a stock out of a hat means you have a 64% chance of underperforming a basic index fund, and roughly a 40% chance of losing money!"