While it’s been the case that the stock market usually goes up, it’s certainly not the case that all stocks always go up.

It’s also not the case that the odds of picking market-beating stocks are similar to a coin flip. Not even close.

Warren Buffett, who’s arguably the most successful investor in history, offered a fresh reminder of this in his new annual letter to Berkshire Hathaway shareholders.

“Over the years, I have made many mistakes,” Buffett wrote. “Our satisfactory results have been the product of about a dozen truly good decisions — that would be about one every five years.“

There’s a lot to unpack here.