Do Randomly Picked Portfolios Consistently Outperform the Market?

Understanding Why Randomly Generated Stock Portfolios Often Perform Well

Limitless Investor
Published in
6 min readJun 11, 2024

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In this article, I will cover the effects of variability and randomness on your investments and how you can benefit from them.

In my previous experiments, I’ve shown that my cat Bunbun created 10 random portfolios 6 performed better than the index, and the top random portfolios returned 229%, 187%, and 147% in a 5-year period tested.

But that’s odd, isn’t it?

Why do random stock portfolios often outperform both Wall Street fund managers and the S&P 500 index?

How can random portfolios generate such impressive profits? Should we all start making random investments?

And is the popular quote from Burton Malkiel true?

“A blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.”

— Burton Malkiel in the book A Random Walk Down Wall Street

I wanted to test that, but instead of using blindfolded monkeys, I have used my cat.

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Henrique Centieiro & Bee Lee
Limitless Investor

👑8X Top Writer | Crypto, AI, MidJourney, Tech, Investing, Mindset |🧠Founder of https://medium.com/be-limitless |🌳Stay in Touch: https://linktr.ee/cryptohenri