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A handful of winners

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By Michael O’Connor, theislandinvestor.com

There seems to be a narrative in the market suggesting that stocks typically go up over time, and therefore, with a little homework 'my stock picks' will go up even more - but it isn't that simple.

This isn't a 50/50-coin toss.

The concentration of winners is more severe than you think.

The Russell 3000 Index has returned an average annualised return of 13% since 1980, but the disparity of returns that generate these profits is rarely focused on.

The vast majority of the positive returns over time can be attributed to just 7% of stocks - the 'mega winners'.

In a similar report studying the historical performance of the S&P 500, only 22% of the stocks in the S&P 500 outperformed the index from 2000 to 2020. Over that measurement period, the S&P 500 gained 322%, while the median stock rose by just 63%.

Put simply, the probability of picking a winner is lower than you think, but all is not lost. A couple of big winners are all you need.

A few good decisions

Warren Buffett - arguably the most successful investor in history, recently attributed his success to just 'a dozen truly good decisions'.

"Over the years, I have made many mistakes - our satisfactory results have been the product of about a dozen truly good decisions — that would be about one every five years. "

That's right, the best investor in history made one good decision every five years.

So how can someone who claims this be heralded as an investment guru?

Asymmetry

A stock can only drop by 100%, but there's no technical limit to how high a stock can go, so when you invest in some truly great companies, the handful of winners can more than offset the graveyard of losses you accumulate along the way.

Let's take one of Buffet's most notorious investments as an example;

Over a period of seven years ending in 1994, Buffett accumulated 400 million shares of Coca-Cola at a total cost of $1.3 billion. As of the end of 2022, that position was worth $25 billion. And let's not forget the $704 million in annual dividends.

For me, stocks like TTD and Nvidia have more than offset some very questionable investment decisions. (24-year-old me has a lot to answer for, but you live and learn, I guess).

Obviously, the goal is only to pick winners, but on the off-chance you can't perfectly predict the future, here's a good place to start:

1. Stop trying to jump on every opportunity. Focus on making a few good decisions and give them time to work in your favour.

2. Don't be fooled into thinking every investment will be a winner. You won't stick it out very long if you expect to be in the green 24/7. There will be guaranteed losses along the way, but over time, a handful of big winners is all you need.

To get my latest stock picks, sign up to my newsletter by scanning the QR code or go to www.theislandinvestor.com.

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Gleneagle Concert Band cast in major Hollywood Film

  Members of The Gleneagle Concert Band have been cast in a major Hollywood movie currently filming in West Cork. The WWII biopic is inspired by Hollywood legend James Stewart’s […]

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Members of The Gleneagle Concert Band have been cast in a major Hollywood movie currently filming in West Cork.

The WWII biopic is inspired by Hollywood legend James Stewart’s life, highlighting his time as a combat pilot after putting his entertainment career on hold to join the U.S. Army Air Corps.
It’s set to be the biggest film production filmed in Ireland this year, with a U.S. release scheduled for November 2026.

Band Musical Director Vincent Condon said the opportunity came about through a mix of curiosity and perfect timing.

“I read that a major film was being shot in West Cork and got in touch to see if they needed a band. Wartime movies often feature military bands, and they were delighted that I reached out. The film required an all-male band under 25, which is historically accurate. Filming took place at the start of October, and it was a fantastic experience for everyone involved.”

Band Manager Ciaran Lynch described the experience as unforgettable.

“The band was excellent. We did everything asked of us with no fuss, and it was amazing to see how a major movie comes together. In a year or so, we’ll be able to sit in the cinema with our families and point to the screen saying, ‘We were part of that!’”

This latest experience follows the band’s highly successful summer tour to Seville and Gibraltar, where they performed alongside the Midleton Concert Band beneath Seville’s spectacular Las Setas structure. The trip marked the band’s eighth international tour, continuing a proud tradition of representing Killarney abroad.

With opportunities ranging from international tours to movie sets, the Gleneagle Concert Band continues to give its members unique and creative musical experiences both at home and overseas.

Anyone interested in joining the band or enrolling for instrumental lessons is encouraged to get in touch on 087 222 9513.

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Local schools launch initiative to promote healthy technology use for children

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Holy Family NS Rathmore, Raheen NS, Meentogues NS and Shrone NS have teamed up with three other schools on the Cork side of the border to launch an innovative project called Agree to Agree.


This is a community wide effort to help families navigate the challenge of children and technology.


The initiative encourages parents of primary school pupils to make a voluntary pledge around healthy technology use at home.


For younger pupils, this includes keeping children smartphone-free, following age-appropriate guidelines for games and apps, and staying off social media during primary school years.


For older pupils who may already own phones / devices, the project suggests practical steps such as reducing screen time, keeping phones out of bedrooms, avoiding age-inappropriate apps, and learning about digital citizenship and online safety.


In the coming weeks, children will bring home information packs and families will have the chance to sign the voluntary agreement. Two parent webinars are already scheduled for October 26 and February 26.


This Pilot was funded by the Department of Education and Skills under the then Minister of Education and Skills – Norma Foley TD. Schools were invited to participate through Tralee Education Support Centre Director, Terry O’Sullivan.


The other participating schools are Ballydesmond NS, Kiskeam NS, and Knocknagree NS.

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