How many people are actually "beating the market"?

[niffe9]

[ QUOTE ]
Survivorship bias: - It is worse in the hedge fund industry than mutual funds. A hedge fund crashes and burns and it is removed from the statistical pool. That has a huge effect on the appearance of outperformance. It reminds me of the European soccer leagues. Say you have divisions A,B and C. The worst team in division A goes to B and so on. Let’s say you examine the records over the last ten years of all A league teams. They will be over .500 on average. Why? We shipped the losers off the charts and aren’t counting them.

[/ QUOTE ]
I think the effect of survivorship bias on mutual funds and hedge funds is often overstated. Many hedge funds close down because of their superior performance and them getting too much money to manage. Mutual funds are compared to benchmarks that have a large survivorship bias of their own (not positive about this correct me if I'm wrong) For example, the original DJIA had 12 stocks where GE is the only survivor today.