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The 80/20 rule

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  1. #1

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    The 80/20 rule

    I read of the 80/20 rule: 80% of one's profit comes from 20% of the companies owned.

    With my portfolio, 19% of the companies generate 64% of the profits. I am almost there. Interesting (to me).


  2. #2

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    Quote Originally Posted by john_1122:
    I read of the 80/20 rule: 80% of one's profit comes from 20% of the companies owned.

    With my portfolio, 19% of the companies generate 64% of the profits. I am almost there. Interesting (to me).
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  3. #3

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    What happens to the rule if you ditch the other 81%?


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    Thats what startups are for. But in practice usually the 80-20 rule scales with the available resources.


  5. #5

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    Quote Originally Posted by kittykaitak:
    What happens to the rule if you ditch the other 81%?

  6. #6

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    https://en.wikipedia.org/wiki/Pareto_principle

    It's surprising how universally true it seems to be.

  7. #7

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    Quote Originally Posted by mrgoodkat:
    It's surprising how universally true it seems to be.
    Is 80/20 really a 'universal law', or is it actually n/100-n with some other n, or is it in fact a different n (wlog larger than 50) in each instance, so the actual universal law is just 'some things are a bit better than others, usually'?

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  9. #9

    In IT it works like this: the last 20% of functionality takes around 80% of the time. That's why when the technical guys tell you "it's nearly done"... It isn't.

    vyral_143, shri, LifeInHK and 2 others like this.

  10. #10

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    Quote Originally Posted by CharSiuNow:
    In IT it works like this: the last 20% of functionality takes around 80% of the time. That's why when the technical guys tell you "it's nearly done"... It isn't.
    As an It guy, those 90% of the complaints come from 10% of the users.
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    - sort of related to some discussions we have had about owning broad market funds and optimizing a little bit with owning individual shares.
    CharSiuNow likes this.

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