A Take: How to Pick a Stock

Why I’m Even Talking About Stock-Picking

Feighan & Associates is a planning and strategy shop, not a crystal-ball stock boutique. Markets, like casinos, set the odds—and the odds aren’t kind to lone-wolf investors. In fact:

• 55 % of U.S. stocks have trailed one-month Treasury bills over their lifetimes.¹
• Only 4 % of stocks generated the entire U.S. market’s net gain from 1926-2024.²

Those numbers are the cold water I throw at every "next-Apple” daydream. Yet humans love the thrill of the wager, and even many seasoned clients keep a “fun money” sleeve. If you insist on playing, do it with guardrails.

Five Guardrails for a Rational Thrill

1. Intellectual Obsession
   Pick a company that keeps you up at night—in a good way. Read the 10-K, stalk the balance sheet, map the supply chain. If six minutes of TikTok research is all you have, stop here.³
2. Childlike Wonder
   A stock should evoke the same spark you felt when you first tasted freedom, nostalgia, or sheer possibility. Humans purchase feelings; if the product makes you feel something, odds are others will open their wallets too. Losses in this bucket sting less because the experience had meaning.
3. Daily Utility
   If the brand shows up in your shower, fridge, or phone dozens of times a week, that ubiquity is a moat. My father taught me this with a glass of Minute Maid: Coke owns the orange juice, even at bedtime.
4. Valuation Discipline
   Quality at a discount is rare—but not mythical. Look for strong return on equity, healthy margins, and a durable competitive edge trading below intrinsic value. When price meets narrative, ears perk up.
5. Expected Payoff—With Eyes Wide Open
   Believe the upside, but document the downside. Professionals with spreadsheets full of losers seldom brag about them at cocktail parties. Survivorship bias is real; don’t confuse luck with skill.

The Hard Truth About “Beating the Market”

Morningstar’s Active/Passive Barometer shows only 7 % of active U.S. large-cap funds survived and beat their passive peers over the last decade.⁴That’s professional money. Expecting better results from casual stock-picking borders on magical thinking.

Where This Leaves Us

• For most wealth-building goals, broad, low-cost strategies win.
• If you crave the thrill, isolate a modest sleeve—capital you can emotionally afford to lose—and follow the five guardrails.
• Data beats bravado. Even the “Oracle of [Your City Here]” eventually confronts mean reversion.

Why I’m Writing These Takes

Financial literacy isn’t optional anymore. Pensions are fading, deficits are ballooning, and the responsibility for retirement has shifted squarely onto individual shoulders. Each month I’ll distill a knotty topic—sometimes markets, sometimes philosophy—into plain English. No sponsors, no hidden agendas, just candid perspective.

If this resonates, bookmark the Perspectives tab and drop by for the next Take. Until then, “Think big and invest in our collective future. Full-throttle those non-zero-sum games.”

References

1. CFA Institute. "Do Stocks Outperform Treasury Bills?" Enterprising Investor. https://blogs.cfainstitute.org/investor/2023/06/20/do-stocks-outperform-treasury-bills/

2. Bessembinder, Hendrik. "Do Stocks Outperform Treasury Bills?" Journal of Financial Economics, 2018. Summary via Arizona State University. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2900447

3. Hulbert, M.(2025, May 3). Guess how much time many investors spend on researching stock buys? It's a lot less than you think—and a lot less than is probably wise. MarketWatch.

4. InvestmentNews. "Active Funds Continue to Lag Behind Passive in 2024, Morningstar Finds." Investment News, March 2025.https://www.investmentnews.com/active-funds-lag-passive-morningstar-barometer-2024-247317

*These are fictional characters, not a real person or actual client.