While these theories are valid when choosing small potential growth companies, in the end, it's still a 50/50 chance. Small businesses can be just put out of business due to changing environment or big companies coming into the niche. Buy more such companies and hope you get a few gems. But your gains may not be as big when you are diversified. Or might be even worse as some are just bad at picking. In the end, buy big quality companies or index might just be better for the common folks