Insider trading has been rife on Wall Street, academics conclude

Re:Insider trading has been rife on Wall Street, academics c... by loeg on Sunday February 11, 2018 @07:10PM (#16355577)

http://www.efficientfrontier.com/ef/900/15st.htm

Most index return comes from a few stocks that generate extreme returns. By picking a single or a few companies, you're likely to miss out on those outsized returns. Buy the whole market and you can't miss.

(Sidenote: clearly, VCs have done the same or very similar calculus with startups.)

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Re:Insider trading has been rife on Wall Street, academics c... by vobios on Sunday February 11, 2018 @10:33PM (#16356333)

By that theory, you should diversify away from those that are not going to be "superstocks" (in the post, Dell grew 550x and pushed up the entire index). For example, HP or Exxon or UPS will probably do okay, but will not outperform the rest of S&P by a huge margin. Therefore, they will only weigh down your big earners.

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