While discussing the distribution of wealth in India, I had referred to the idea of self-similarity with the example of the Pareto principle. Today I would like to discuss how the stock market behaves in a similar way!
The first part of this series is here: Fat Tails: The True Nature of Stock Market Returns – Part 1
To recap, we say that 20% of the population hold 80% wealth. If we zoom in on the 20%, then: 20% of 20% population hold 80% of 80% wealth.