Old Davis, the king of insurance stocks, held more than 100 stocks for a long time, but his grandson discovered during review that almost all the profits came from five or six insurance stocks among them.

Mr. Buffett once said at the Berkshire Hathaway shareholder meeting that he has held four to five hundred stocks, but in fact most of the profits came from ten of them. The problem is that no one knows in advance which stocks these ten are, so investors need to persist in investing and holding them for decades.

The profit logic of venture capital companies is the same. Only 0.5% of projects will have a return on investment of more than 50 times, but this is indeed the main source of profits in the venture capital industry.

Not only investment, but also personal endeavors and company management all follow the law of fat tail, including risks.

Friends who are interested can read "The Fat Tail Effect" by risk management guru Taleb.