The challenge that stands before a professional investor each year is the same challenge that faces a recording artist. They each want to top last year’s performance, and they each need 10 or 12 new pieces of material to achieve the goal. The “material” a recording artist needs is 10 or 12 new well-written songs, while an investor needs 10 or 12 new well-researched stocks. In each case, the work must be of high quality, so as to produce at least two or three big “hits” to drive the album’s or the portfolio’s performance. Think of your all-time favorite music album, and then imagine it without the top 3 songs—it’s no longer your favorite album. It’s the same with investing: Lop off your top 3 performers each year, and you won’t generate outsized returns.