Rule Du Jour: Rule #67 - FIND THE FEW (Patreon)

Investing Rule: Find the Few or Die

"Stock picking is hard—but critical—because just a few stocks drive all the gains. Miss them, and you miss out." IA 2025

Numpties out there say stock picking is impossible. It is not. It is hard. You need Models. You need thousands of hours of research. You need to know - Rule #59 Imagine The Future! This is what we do here. ID the winners early and get in hard.

Data Behind the Rule

• Only a Few Winners Matter: Since 1926, just 86 stocks have generated over half of all net wealth in the U.S. stock market. Most stocks underperform or lose value. There are over 27,000 Stocks.... only 86 Matter. That is 0.3% MATTER. The rest is shit.
  

• Majority of Stocks Lose Money: Over 51% of stocks deliver negative lifetime returns, making most picks losers by default. You are welcome. This is why I hate ETFs and Indexes.
  

• Prediction Is Possible: Forecasting which companies will become the next Nvidia or Tesla etc is hard but it is possible. Do the work.
  

• Passive Investing Makes It Harder: With index investing - it keeps crap companies alive. Price discovery weakens, making undervalued stock opportunities even rarer.

SUMMARY

Stock picking is incredibly difficult but also critically important. Passive investing reduces price signals, which makes it harder but still doable. For most investors, broad diversification is safer; for stock pickers, they kill it by doing the work. DO THE WORK