There is a famous quote in the book A Random Walk down the Wall Street that goes like this.
A blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.
This seems audacious at first. But this was soon further supported by an article titled Any Monkey Can Beat The Market by Rick Ferri. In the article, it was highlighted that portfolio choices made from monkeys throwing darts at stock pages almost always beat the 1,000 stock capitalization weighted stock universe each year from 1964 to 2010.
In another experiment shared here, it shows that exceptional performance of portfolios rarely happens in the 2nd year after a successful first year. Regression of the mean does somehow happen.
(Source: https://www.marketwatch.com/amp/story/when-you-realize-how-much-luck-goes-into-investing-you-might-change-your-methods-2017-11-13)
In the chart above you could see that the expected ranks of the portfolios in the second year were very...