"We can apply the reasoning to the selection of investment categories—as if they were the managers in the example above. Assume you are standing in 1900 with hundreds of investments to look at. There are the stock markets of [[Argentina]], Imperial [[Russia]], the [[United Kingdom]], Unified [[Germany]], and plenty of others to consider. A rational person would have bought not just the emerging country of the [[United States]], but those of [[Russia]] and [[Argentina]] as well. The rest of the story is well-known; while many of the stock markets like those of the [[United Kingdom]] and the [[United States]] fared extremely well, the investor in Imperial [[Russia]] would have no better than medium-quality wallpaper in his hands. **The countries that fared well are not a large segment of the initial cohort; randomness would be expected to allow a few investment classes to fare extremely well. I wonder if those “experts” who make foolish (and self-serving) statements like “markets will always go up in any twenty-year period” are aware of this problem**." --- **Tags** -- [[quotes]], [[fooled-by-randomness]], [[investments]], [[index-funds]], **Source** -- [[202410121132 - B - Fooled by Randomness]]