{"id":5844,"date":"2022-07-27T23:56:00","date_gmt":"2022-07-27T15:56:00","guid":{"rendered":"https:\/\/www.granitefirm.com\/blog\/us\/?p=5844"},"modified":"2025-06-07T11:16:15","modified_gmt":"2025-06-07T03:16:15","slug":"survivorship-bias","status":"publish","type":"post","link":"https:\/\/www.granitefirm.com\/blog\/us\/2022\/07\/27\/survivorship-bias\/","title":{"rendered":"People believe successful investors are survivorship bias cannot succeed"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/07\/27\/survivorship-bias\/#The_reason_for_this_post\" >The reason for this post<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/07\/27\/survivorship-bias\/#Whats_wrong\" >What&#8217;s wrong?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/07\/27\/survivorship-bias\/#If_the_majority_view_on_this_matter_is_right\" >If the majority view on this matter is right<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/07\/27\/survivorship-bias\/#The_logic_is_totally_unreasonable\" >The logic is totally unreasonable<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/07\/27\/survivorship-bias\/#Implied_meaning\" >Implied meaning<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/07\/27\/survivorship-bias\/#Closing_words\" >Closing words<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/07\/27\/survivorship-bias\/#Related_articles\" >Related articles<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"The_reason_for_this_post\"><\/span><strong>The reason for this post<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>When I wrote about Buffett a few days ago, I noticed that many people, regardless of Wall Street and many friends around me, attribute Buffett&#8217;s investment success to the <a href=\"https:\/\/www.wealest.com\/articles\/survivorship-bias\" target=\"_blank\" rel=\"noreferrer noopener\">Survivorship Bias<\/a>. This view includes two things:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>No one denies that Buffett is the most successful investor in history: he has more than 70 years of continuous investment experience and an investment position of hundreds of billions; these two prerequisites for judging a successful investor are all ranked first in history, the fact is hard to be denied.<\/li>\n\n\n\n<li>Those who attribute Buffett&#8217;s success in investing to survivorship bias, most of their investment results are lackluster, even appalling. Just because he works on Wall Street means he is a great investor, of course no, and it has absolutely nothing to do with investment performance. The latest report from S&amp;P Dow Jones Indices (ticker: SPGI) shows that in 2021, 79% of US stock fund managers  performed worse than the performance of the US stock market; the typical representative of these fund managers is Wall Street.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Whats_wrong\"><\/span><strong>What&#8217;s wrong?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Survivorship bias isn&#8217;t entirely unfounded, but it&#8217;s the people citing it, the context in which it applies, and the misinterpretation. Its definition is:<\/p>\n\n\n\n<p><em>Survivorship bias,&nbsp;survival bias&nbsp;or&nbsp;immortal time bias&nbsp;is the&nbsp;logical error&nbsp;of concentrating on the people or things that made it past some selection process and overlooking those that did not, typically because of their lack of visibility. This can lead to some false conclusions in several different ways. It is a form of&nbsp;selection bias.<\/em><\/p>\n\n\n\n<p>The problem is that the most successful investors are not selection bias, because the fact is that they have better investment performance than the vast majority of investors, that is, they are &#8220;generated from a sample of all investors&#8221;, of course not by a deliberately selected minority (selection bias).<\/p>\n\n\n\n<p>&#8220;Most people only see the investment performance of Buffett and a few extremely successful investors, but they ignore the efforts behind their investment performance to achieve such investment performance&#8221; This is what most people do not see, or is deliberately simplified, That&#8217;s the problem.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"If_the_majority_view_on_this_matter_is_right\"><\/span><strong>If the majority view on this matter is right<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Let&#8217;s assume that the majority of people are right on this (attributing Buffett&#8217;s success in investing to survivorship bias), here&#8217;s what will happen:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It means that no one can have as good investment returns as Buffett and others, Buffett is just very lucky. This is the main logic behind many Wall Street or financial education who despise Buffett, who think Buffett is nothing more than that lucky monkey who shoots a target.<\/li>\n\n\n\n<li>If Wall Street or the financial education despise Buffett&#8217;s main logic and think that Buffett is the monkey who shoots the mark with extra luck. Then we have to find the monkey who has been shooting and flying the standard for more than 70 years in a row. Of course, there are still people who hold this view and insist that Buffett is a very lucky monkey who has been shooting and flying the standard for more than 70 years in a row.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"The_logic_is_totally_unreasonable\"><\/span><strong>The logic is totally unreasonable<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Personally, I certainly believe that survivorship bias is rooted, and it can even be used to show that what many people think of as some common sense is actually untenable. For example, we often see in the newspapers that someone who lived to be 130 years old and smoked when he was a child, the media began to expand the explanation that smoking does not reduce people&#8217;s life expectancy. <\/p>\n\n\n\n<p>We all know the fault of this sentence now, because the sample taken is only one person, and it is not representative at all. The samples taken by modern medicine are all human beings. Of course, what we should believe is that the samples are modern medicine of all human beings &#8212; Smoking will shorten your life.<\/p>\n\n\n\n<p>But Buffett has been proved successful, and the benchmark for the comparison sampling is &#8220;all&#8221; investors.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Implied_meaning\"><\/span><strong>Implied meaning<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In the event that most people attribute Buffett&#8217;s investment success to survivorship bias, what I&#8217;ve actually observed is this:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Most people don&#8217;t want to make long-term investments like Buffett.<\/li>\n\n\n\n<li>Don&#8217;t want to put in research and effort on investment (this part is invisible, making investors easy to be fooled and misled by the media or so-called investment experts to mislead the wrong investment concept); that is, lazy, just looking for shortcuts and dreams to get rich overnight or look for the touted stocks.<\/li>\n\n\n\n<li>Oversimplifying things: Investing is simple, but not easy: but most people want a simplified operation and idea; many people always think that successful investors have insiders information , and buy stocks before it, or hidden secrets.<\/li>\n\n\n\n<li>The display of the evil side of human nature: jealous of successful people and denying the efforts of others.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"143\" height=\"107\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2022\/07\/b-1600x1200-2.jpg\" alt=\"survivorship bias \" class=\"wp-image-12558\"\/><figcaption class=\"wp-element-caption\">Credit: Wikimedia<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Closing_words\"><\/span><strong>Closing words<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Others say what they say. On the road of investment, the opinions of the mass are usually wrong.<\/p>\n\n\n\n<p>If you, in your mind, believe Buffett&#8217;s success is a survivorship bias, you&#8217;ll never succeed in investment.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"block-9d402b81-75c9-41fa-9a2d-6be1252e074e\"><span class=\"ez-toc-section\" id=\"Related_articles\"><\/span>Related articles<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/04\/27\/buffett-portfolio\/\" target=\"_blank\" rel=\"noreferrer noopener\">The commonalities of Buffett portfolio \u2013 cheap, fixed income, repurchase<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/04\/07\/buffett-deserves-study\/\" target=\"_blank\" rel=\"noreferrer noopener\">Why Buffett deserves further study?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/06\/06\/seeking-facts\/\">Seeking facts is the first step in investment<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/07\/27\/survivorship-bias\/\" target=\"_blank\" rel=\"noreferrer noopener\">People believe successful investors are survivorship bias cannot succeed<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/07\/10\/sustained-investor\/\">A investor can be sustained or not? how to verify?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/12\/19\/investing-has-no-formula\/\" target=\"_blank\" rel=\"noreferrer noopener\">Investing has no formulas, but there are ways to invest successfully<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/02\/28\/factor-luck\/\">How big a factor does luck play in investment success?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/04\/19\/successful-investors\/\" target=\"_blank\" rel=\"noreferrer noopener\">The main investment principles of successful investors are similar<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/09\/06\/chance-of-making-mistakes\/\" target=\"_blank\" rel=\"noreferrer noopener\">Invest success depends on less chance of making mistakes<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/03\/mistakes-of-omission-and-mistakes-of-commission\/\" target=\"_blank\" rel=\"noreferrer noopener\">Mistakes of omission and mistakes of commission<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/02\/investment-uncertainty\/\" target=\"_blank\" rel=\"noreferrer noopener\">The uncertainty in investment<\/a>&#8220;<\/li>\n<\/ul>\n\n\n\n<p><em><strong>Disclaimer<\/strong><\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The content of this site is the author\u2019s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.<\/em><\/li>\n\n\n\n<li><em>I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers&#8217; direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Noticed that many people, regardless of Wall Street and many friends around me, attribute Buffett&#8217;s investment success to the Survivorship Bias. This view includes two things<\/p>\n","protected":false},"author":1,"featured_media":12558,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11,14,245],"tags":[154],"class_list":["post-5844","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buffett","category-investing-concept","category-mutual-fund","tag-spgi"],"_links":{"self":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/5844","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/comments?post=5844"}],"version-history":[{"count":24,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/5844\/revisions"}],"predecessor-version":[{"id":36942,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/5844\/revisions\/36942"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media\/12558"}],"wp:attachment":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media?parent=5844"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/categories?post=5844"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/tags?post=5844"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}