Most of us that take a loss on a stock and just move on and...

Most of us that take a loss on a stock and just move on and focus on the next stock or just get on with our lives. We accept the mistake or the bad luck, whichever may have been the case and take responsibility rather than blame others.
I guess some people try and deal with the pain of bigger losses by bagging the stock, hoping it goes lower to make themselves feel better about taking the loss. They also might blame others to shift responsibility rather than accept their loss as their loss, learn from it and move on.
People that shift blame rather than accept and learn from their mistakes would find it difficult to succeed with small caps and that would explain a negative bias to small caps. Those that have enough experience with smaller stocks can outperform the market. I would agree that most punters in small caps can lose money. A lot of research is needed to do well over time.
Interestingly, the chart below shows that even the bottom managers by performance did better with micro caps over the long term compared to small caps.
That outperformance would be despite the fact that micro caps are likely to experience more dilution than small caps. It's not just about dilution. It's also about the upside potential.

"Over time, micro-cap managers generate higher returns than traditional small-cap managers, with top-quartile, median, and even bottom-quartile micro-cap managers outperforming their small-cap peers over multiple historical time frames."


https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwiQ6YWCvPKEAxWi9jgGHQzIBvMQFnoECBYQAw&url=https%3A%2F%2Foberweisfunds.com%2Fwp-content%2Fuploads%2F2022%2F02%2FMicro-Cap-The-Asset-Class-of-Opportunity.pdf&usg=AOvVaw30AyWLc_6FEsZvpNfOp42c&opi=89978449