Yes, Liquid Stocks Can Outperform — If Engagement Is Treated Correctly.
In liquid markets, most stocks exhibit meaningful correlation to the S&P 500, creating a shared variance profile that dominates short-term outcomes.
That fact is often misinterpreted as a ceiling on outperformance.
It isn’t.
It simply means that without controlling when and how exposure is engaged, beta overwhelms results — regardless of how strong the underlying analysis may be.
Public equities often account for 60–80%+ of portfolio drawdown in multi-asset portfolios.
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Public-equity fundamental investing often applies:
The Execution Based Finance Blind Spot
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In the primary market, execution is largely administrative. It is governed by documentation, allocation mechanics, legal process, and capital formation logistics—not by real-time interaction with liquidity.