Just For Thinking ....
How much of your investment success is due to outcome bias and luck factor?
How can you know?
Hmm......
Measure, then you will know.
The Luck factor is likely to run out over a large number of occurrences over a long period of time. Right?
For stock investment, we can measure Portfolio XIRR since inception over long period of time e.g. 15, 20, 30 years or more.
Portfolio = Stocks + War Chest (Cash available for investing)
XIRR is a measure of number over a period of time.
A portfolio of stocks and war chest is a definitely a large number and 15 years (2 - 3 market cycles) should be long enough for a retail investor.
XIRR is like ......