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The Degree of Challenge: Incontrovertible Irrationality

The Degree of Challenge: Incontrovertible Irrationality. More than 70% of new manufacturing plants in North America close within their first decade of operation. More than 75% of mergers and acquisitions never payoff

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The Degree of Challenge: Incontrovertible Irrationality

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  1. The Degree of Challenge: Incontrovertible Irrationality • More than 70% of new manufacturing plants in North America close within their first decade of operation. • More than 75% of mergers and acquisitions never payoff • 80 percent plus of new product market entries are abandoned within a few years • More than 80% of start-up ventures in a wide range of industries failed to achieve their market-share target. • More than 80% of equity mutual funds consistently underperforms S&P 500. * • 80% of all stock investors end up losing money. • 90% of all naked option players (buy uncovered puts or calls) end-up losing money. • Up to 70% of people in leadership positions fail. • 80% of the reported findings in the literature of particular academic disciplines eventually prove wrong or questionable.

  2. A Justification to Think Different Since 1998, the effective return to hedge-fund clients has only been 2.1% a year, half the return they could have achieved by investing in boring old Treasury bills. A wealth of research shows the ranks of such star managers are relatively small. And their record of outperformance is typically fleeting measured against the decades needed to save for retirement.

  3. Only 11% of the highly paid, master of the universe hedge fund managers managed to beat the S&P so far this year. • That's why they earn the big bucks. That, and the stupidity of their investors.

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