Most Stocks Lose Money

We continue the theme from last week. Recognising a bias is only half the work: the other half is designing decisions so the bias cannot run the show. Here are six more that sit at the centre of most costly mistakes.

Notice how many of these push the same way: they make us sell our winners early and cling to our losers. Hold that thought for the special study later in this issue, because the data on which stocks actually make money turns that instinct into a very expensive habit.

Two threads this week, and both feed straight back into markets.

Australian property keeps generating headlines, but the narrative has shifted. Auction clearance rates are sliding and many prices now look to be falling. More surprising was a poll showing more support than expected for the government's budget measures. It is not a majority, but it is a long way from the rejection some assumed.

Underneath the headlines sits the number we have flagged for a year or more: Australian households carry the highest debt levels in the world. An economy grows by adding debt through one of four channels, government spending, consumer borrowing, business investment, or exports. Since 2000 Australians have leaned almost entirely on the second one, and nearly all of it has flowed into house prices.

Here is why we build portfolios around ETFs with only a few single company holdings. It comes straight from Hendrik Bessembinder's work on what he calls the returns to doing nothing. A new study out of Arizona State tracked every stock listed on US markets from 1926 to 2025, some 29,754 companies across a century.

The market created US$90.96 trillion of shareholder wealth over that time. All of it came from just 1,082 companies. The other 27,999 gave investors nothing net. Only 48% of stocks made any money at all, only 41% beat a savings account, and 59% lost money for shareholders.

That gap between the median and the average is the entire story. A handful of enormous winners drag the average into the sky while the typical stock quietly bleeds. And the concentration is getting more extreme, fast.

Who were the giants? Measured against what the same money would have earned in Treasury bills, the largest wealth creators are Apple at about US$5.02 trillion, Nvidia at US$4.58 trillion, Microsoft at US$4.03 trillion, Alphabet at US$3.57 trillion and Amazon at US$2.27 trillion. Apple and Nvidia between them account for more than 10% of all the wealth the US market has made since 1926. These names appear here as the study's biggest historical wealth creators, not as tips or recommendations. This is education only, not advice to buy or sell anything.

The typical company got worse while all this happened. In the first six decades of the study the median stock returned 63.6% per decade. In the last four decades that collapsed to 5.8%. The index kept rising, but most companies stopped rising with it. People keep saying the market is being carried by a few AI names as though it were something new. It never was. The market has always run on a tiny number of winners. What changed is how few of them there now are.

This week's episode is Everybody's Knackered: Oil, Chips and Chokepoints. Steve, Tom and Jacob get into the energy picture after the broken ceasefire, the scramble over semiconductors, and the supply chokepoints that keep tying the two together. The full show notes accompany this edition.

We will keep updating the sector scorecards, momentum indicators and macro notes as these themes unfold. If conditions shift, you will see it in the Wells calls, the Signals and Noise Premium updates and the portfolio insights.