That is exactly the thought I’ve had and have been wanting to articulate. I’ve almost never seen the search for undervalued gems pay off. Sure we can all think of one or two. I remember a guy on here (Putnid?) who was in Enphase at ~1.00 or so when it was near bankrupt (I think) in 2017. It went to $300+ in 2022. Imagine he took some huge gains along the way.
But I find that my journey toward consistently beating the market has entailed figuring out what stocks/companies to say no to. I don’t need world beaters…I need good companies that do well and beat the market. If my average stock can gain 25% or even 50% this year, I’m in a great spot going into next year. That’s repeatable success and a realistic goal, and the magic of compounding means if I can keep that up, the 10 yr or 20yr returns will be incredible.
Averaging a 25% gain for 20 years = an 8,573% gain. $100,000 turns into $8.67m.
If my average stock goes nowhere this year, or even goes down, perhaps because I concentrated into a position that’s losing money when I could have been making money elsewhere…then I’ve already handicapped my portfolio going into next year.
There will be losing years like 2022. But overall, consistency can overcome the down years, even without huge once-in-a-blue-moon type wins. It’s just math.
Bear