[betatim]

Can someone explain why they flip a coin twice per year per fund?

The author wrote a second column (http://www.nytimes.com/2014/07/27/your-money/heads-or-tails-...) explaining how they came up with the number of funds that would outperform the market five years in a row.

The reasoning goes like this: 2/2862 funds made it (or about 0.07% of funds).

The author then says: If you assume a fund has a 50% chance of beating the market, and a 50% chance of falling behind then the chances of one beating the market five years in a row would be 0.5^(5 * 2). They just state that they flip a coin twice per year per fund (hence 0.5^10), can someone explain why?

[scottfr]

"Beat the market" is misleading. In the article "beat the market" means be in the top 25% of the market, therefore equivalent to winning two coin flips each year.