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Another trite "How to Pick 'em" backward looking exercise in survivorship bias
on June 6, 2007
Earnings growth drives stock prices - this is not news.
What is absent from this entire book is the notion that there are a lot of losers for every winner. "If you had bought Ebay...." precludes the fact that EBay attracted competition and there were other ides out there for auction websites. Same with Amazon and e-tailing. So it is convenient to say, "You would have made all the money in the world if you bought these stocks", but the odds of getting it right more than 2-3x in a cycle are low.
Also....how many times did he mention Starbucks? He went on a company visit, picked them early, and it worked. How many other retail names did he pick? How did they work out? We don't hear about those - survivorship bias.