Buy the haystack
Why owning the whole market beats chasing individual stocks
A few people have asked me recently about SpaceX.
Elon Musk’s rocket company is preparing to offer its shares to the public via an IPO, and the excitement is real.
People want in.
They want to catch the next big thing before it takes off.
I understand the impulse. I really do.
But here’s what I’ve learned after more than 30 years in this business: the desire to find the right stock at the right time — to find the needle in the haystack — is one of the most costly instincts in investing.
And the research backs this up in a striking way.
A finance professor named Hendrik Bessembinder has spent years studying the long-term performance of individual U.S. stocks.
He published a well-known paper in 2018, and just this month he released an updated study covering a full century of data — from 1926 through 2025.
What he found is worth sitting with for a moment.
The U.S. stock market created $91 trillion in wealth over that 100-year period.
That’s a remarkable number.
And yet just 46 companies account for half of it.
Apple and Nvidia alone were responsible for more than 10% of all that wealth creation.
But here’s the other side of that coin.
The median stock — the one right in the middle of all stocks ever traded — actually lost ground compared to simple Treasury bills.
More than half of all companies that have ever traded on U.S. markets destroyed wealth rather than created it.
The average return across all stocks over this century? 30,621%.
The median return? Negative.
That gap — between the average and the median — is the whole story.
Simple statistics refresher: Here’s a quick way to think about the difference between an average and a median: if you line up all the stocks by their lifetime returns from worst to best, the median is simply the one in the middle. The average, on the other hand, gets pulled way up by a small number of extraordinary performers at the top of that line.
And that distinction matters a lot here.
A very small number of companies did something extraordinary.
Most did not.
And nobody, not even the sharpest investors in the world, reliably knows in advance which companies will be which.
So what does this mean practically?
It means the goal isn’t to find the needle.
It’s to own the entire haystack.
When you hold a broadly diversified, low-cost portfolio — one that reflects the entire market — you don’t have to pick the winners.
You own them all.
If SpaceX goes public and becomes the next Apple or Nvidia, you’ll already have exposure.
You don’t need to chase the IPO.
You don’t need to get in on the ground floor.
Patient, diversified ownership puts you in the game for whatever comes next.
This isn’t a passive or defeatist strategy.
It’s a deliberate one, grounded in a century of evidence.
A few things worth thinking about:
Does your current portfolio reflect a broadly diversified approach, or is it concentrated in a handful of companies or sectors?
Are you — or someone advising you — making active bets on individual stocks? If so, what’s the evidence that approach will work over time?
When you feel the temptation to chase a hot stock or a buzzy IPO, ask yourself: what exactly am I betting on?
Low cost matters as much as broad diversification. High fees quietly erode the very returns you’re trying to capture.
You don’t need a perfect portfolio. You need a sound one — and the patience to let it work over time.
The temptation to chase the next big thing never fully goes away.
SpaceX today, something else tomorrow.
What keeps you grounded is a clear investment philosophy, one built on evidence rather than excitement.
Take a few minutes to revisit yours.
Ask yourself whether the approach you’re following — or the one being followed on your behalf — is one you’d still choose if you removed all the noise.
If you have questions or want to talk through your situation, I’m always glad to hear from you.
Just reach out through my website or reply to this email.
Links and things
A few weeks back, I wrote about “planning” with inspiration from a Jason Fried podcast.
To kick off that piece, I mentioned my friend and colleague Brian, and I’d like to once again ask you to read another of Brian’s articles that was inspired by that same podcast episode:
I was planning to write about this very concept, but Brian beat me to it and did a wonderful job framing the idea for your consideration.
Thank you for reading!
If you have a question or would like my advice, simply reply to this email with your questions and I’ll be happy to respond with my thoughts…
Until next Wednesday,
Russ