‘If you randomly pick a stock, you only have a 20% chance of turning a profit. The story is the same with large-cap stocks.’

The fundamental problem with picking stocks is it's not a 50/50 chance as most investors think.

80% of all stocks generated 0% return and the remaining 20% of stocks accounted for all the gains.

If you randomly pick a stock, you only have a 20% chance of turning a profit. pic.twitter.com/Mz7pFbeMQp

— Market Sentiment (@mkt_sentiment) June 3, 2023

If you still think you can pick the winners, consider this:

The last two decades were dominated by tech.

But, take a look at the top ten performers in S&P 500 from 2000 to 2020.

Only two of them were from tech. pic.twitter.com/XG4IPLPicB

— Market Sentiment (@mkt_sentiment) June 3, 2023

Though the business had solid fundamentals and great growth, the market conditions and sentiment caused the stock to fluctuate.

Imagine holding the business when it’s down 20% while the market is up 10%.

You'll start to question your investment. pic.twitter.com/vgKK4hJ7qg

— Market Sentiment (@mkt_sentiment) June 3, 2023

And for manager skill to be considered statistically significant, it would take a fund manager 36 years of continuous 2% alpha over the benchmark.

(h/t) @benjaminwfelix pic.twitter.com/FnfH25JcSK

— Market Sentiment (@mkt_sentiment) June 3, 2023