Kalpen Parekh used a striking analogy to describe the challenge of wealth creation, calling investing a “minority game” and stressing how rare long-term success really is.
Through a social media post on Friday, DSP Asset Managers Pvt. Ltd.'s Managing Director & Chief Executive Officer Parekh noted that with an after-tax annual income of Rs 25 lakh in India, a family of two adults and one child already ranks among the richest 4% of the world, meaning 96% of humanity is poorer. Yet, even at that level, he said, getting rich is hard and staying rich is harder.
Parekh highlighted how investors routinely lose to inflation, currency depreciation, and their own behaviour. Drawing on evolution, he pointed out that the Earth is 4.5 billion years old and 99.9% of all species are extinct, underlining that survival is rare — and markets behave the same way.
Looking at market history, he said that over the past 30-50 years, fewer than 15% of global stocks delivered more than 12% CAGR. Citing Henrik Bessembinder's research, he added that since 1926, less than 4% of stocks created all the wealth above bonds, and removing those few winners leaves the rest with bond-like returns. In other words, very few species survive, very few companies compound, and very few investors succeed.
Against that backdrop, Parekh contrasted the exceptional case of Warren Buffett, who generated roughly 55,00,000% returns since 1965, a figure he said “almost feels unreal” and “almost impossible”.
He concluded by urging investors to “learn to play the minority game” to improve their odds: don't quit, survive first, and growth will follow.
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