Stop Chasing Winners—Understand Survivorship Bias

In 2019, a young fund manager pitched a stellar track record—14% annual returns over five years. Onstage, investors leaned forward, phones at the ready to execute orders. Yet behind the scenes, people in that niche knew dozens who launched the same strategy and blew up within two quarters. Those failures never made headlines, never sold books, and never got a second meeting. The featured hero looked unstoppable until the rare downturn hit—then he disappeared.

By zeroing in on the 5% who survived, investors mistook performance for skill. The rest of the story—500 peers who tried and failed—vanished. The result? A classic case of survivorship bias. If you build portfolios only from winners, you mask the hidden risks and overestimate the true odds. Survivorship bias isn’t just a data quirk; it’s a threat to your life savings and strategy credibility.

Next time you see a superstar record, pause. Ask: “How many dropped out before I saw it?” Chances are good it was more than the winners. By widening your lens to include everyone who began the race—not just who crossed the finish line—you’ll spot real edge, not random luck.

Watching the next big pitch, you quietly ask for the full list of 200 firms that launched that strategy—and learn how many fell off the map. Then you gauge the true odds of lasting. Wake up tomorrow and do this in your industry.