The Survivorship Bias Problem

Survivorship bias occurs when we focus only on successful examples and overlook those that failed or disappeared. This can lead to misleading conclusions because we're missing the full picture. For example, studying only the successful companies that survived ignores many others that failed, skewing our understanding of what leads to success. In investing, it might seem like certain strategies always work because we only hear about the winners. Recognizing survivorship bias helps us evaluate data more accurately by considering both successes and failures, avoiding overly optimistic or incomplete conclusions.