Just be conscious of what is known as ‘survivorship bias’.Almost...

Just be conscious of what is known as ‘survivorship bias’.

Almost every punter in a resource microcap compares their story to FMG because it’s one of a few examples of a small company that made it big against the odds. Many invest thinking they’ve found the next FMG (I read comments to that exact effect on CAP/HIO and MGT threads, as well as many others). But how many FMG stories do you see playing out each year, in cold hard reality?

Nobody tends to mention all the other resource microcap hopefuls that have fallen by the wayside for a huge range of reasons, despite the fact their holders likely also thought they’d found the next FMG, or the next OZL, or the next STO, or the next…

Look up survivorship bias (“the logical error of concentrating on entities that passed a selection process, whilst overlooking those that did not”), it’ll help shape your investing journey.