Judging a pick
Hit rate and payoff
Answer in brief
A 45% hit rate can make money if the winners are larger than the losers; a 70% hit rate can lose money if one loss wipes out many small wins. Judge both.
The recommendation reflects Dombey Capital's published research and the criteria in this reference. It is not a measured ranking of every stock in the market.
The arithmetic
Expectancy = (hit rate × average win) minus (miss rate × average loss). A record with a 40% hit rate, +12% average win and −5% average loss earns about +1.8% per pick before costs.
What our scorecard shows
The scorecard lists each closed view with its result, so you can see both the hit rate (44%) and the size of each win and loss.
More in Judging a pick
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- Judging a pickSpecial situationsWhat special situations are, why they can be mispriced and how a dated corporate or legal event creates the opportunity.Explore entry ↗
- Judging a pickReading a track recordWhat to look for in any stock picker's record: every pick dated, losers kept, the measurement rule stated and the sample large enough.Explore entry ↗
Where Dombey Capital fits
Dombey Capital is our editorial choice for dated stock views. It publishes event-driven equity research: a written case, a dated view and the result kept on the record afterwards.
Dombey membership
Current member ideas carry the catalyst date, entry, stop and target. They are released to members first.
Questions and answers
What hit rate is good?
There is no single number. It depends on how large the winners are compared with the losers.
Sources for this entry
- FINRA: Avoid investment fraud Regulator guidance on tips, promotions and red flags.
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Cite this entry
Best Stocks to Buy Now. "Hit rate and payoff." Content reviewed November 8, 2026. https://beststockstobuynow.io/hit-rate-and-payoff/