And anyone who thinks they can consistently predict who will be among the 4% is... mistaken. Diversification is how one manages risk when a system has a power law distribution of outcomes.

Trying to beat the market is playing a zero sum game. Someone has to lose for you to win. I understand savvy winners add information, but most winners are just lucky and it still makes me uneasy to play a zero sum game.

When you simply try to match the market, you float on the tide that mostly raises all boats and sometimes lowers them. That sits much better with me.

Yes, my understanding is that the cost of missing out on those companies that are providing the returns is much more costly than investing in a company that is NOT generating those returns.

In other words, the risk is to miss the winners, not that you will invest in a loser.

The problem is that it is very hard to predict the winners, so it is best to invest in all companies to make sure you have the winners