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Power Laws and Public Markets with Meb Faber, Founder & CIO of Cambria Investment Management

Compounders Podcast

NOTE

Concentration of Returns in Stocks

A small percentage of stocks, around 5-10%, contribute to the majority of returns in the market. Research studies like the Capitalism Distribution confirm this, showing that about two thirds of stocks underperform the index, half have no return over their lifetime, and a quarter go to zero. To achieve significant returns over time, one must own the big winners like McDonald's, IBM, or Wal-Mart.

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