Two Books. One Purpose. A Better Life.“Template on how to lead a happier and fuller life.”—Ramesh Damani, Member, BSE“Teaches you how to think, judge, and behave…”—Arnold V. D. Berg, Century Mgt.Click here to buy The Long GameClick here to buy SketchbookClick here to buy the combo (The Long Game + Sketchbook)On Christmas morning of 2025, a passenger flight from Bengaluru landed at the new Navi Mumbai airport (NMI). It was the first commercial landing there, and so it got the water cannon salute that airports give their first commercial arrival.The airport isn’t far from where I have lived the past 23 years of my life. And so, when I saw the pictures, I thought about all the dates this place had been given over the years.The airport was first proposed in 1997, and approved by the central government in 2007. The GVK Group was awarded the project in 2017. The Prime Minister laid the foundation stone in 2018. The Chief Minister at the time set a deadline of 2019, while officials said 2021 was closer to the truth.Then came the pandemic, GVK ran into financial troubles, and the Adani Group took over in 2020. In December 2024, the operator was promising commercial flights by May 2025. By March 2025, the airport’s COO was saying late July or early August. Finally, the first passengers flew on 25th December 2025.If you had asked me in 2018 to bet on the opening date, I would have gone with the official one, because the people announcing it knew the details far better than I did. I could also see for myself the hill being flattened, the marshland being cleared, the river being diverted, and the land being raised. So, things were going as ‘planned.’And I would have lost the bet.Now, for a moment, forget about this airport and ask how often big projects finish when their builders say they will.The bridge that connects Mumbai to this airport has a similar story. Atal Setu first showed up as the “Uran Bridge” in a traffic report from 1963. Its foundation stone was laid at the end of 2016 with a target of 2021, and it opened in January 2024.In their book, How Big Things Get Done, authors Bent Flyvbjerg and Dan Gardner explain why most ambitious projects fail and how to make them succeed using extensive research. As per their research, only 8.5% finish within both their budget and their deadline, and just 0.5% manage that while also delivering the benefits they promised. The flaw they write about is that most project leaders rush into execution, and then get bogged down by unexpected crises once the money and momentum are already committed.So, the smarter bet for me in 2018 for the NMI airport would have been “late, probably very late.” And I could have made it without knowing anything about how the project was progressing on the ground.Noted psychologist Daniel Kahneman wrote in Thinking, Fast and Slow that when you build your forecast from the details of the case in front of you, you’re using the “inside view.” But when you step back and ask what happened to a lot of similar cases, you’re using the “outside view.” And the answer you get from that crowd of similar cases is called a “base rate.”I spent eight years in equity research, and I can tell you that most of us forecast stocks the way I would have forecast that airport.Imagine a company on its earnings call. The CEO says they see 20% growth for the next decade. The reasoning he gives is that market is under-penetrated, incomes are rising, the brand is strong, and the management team is smart enough to capitalise on the opportunity. Hearing all this, the analyst reports put 20% into their models, and so do you.Now, while every piece of the story may be true, it’s still the inside view, and it never considers the one question that would humble it. That question is – Out of all the companies that ever stood where this company stands now, how many grew 20% a year for the next ten years?In 2016, Michael Mauboussin and his colleague at Credit Suisse, Dan Callahan, went and counted. They took around 1,000 largest companies in the world by market value in every year since 1950, till 2014. This included companies that did not exist by the end of their analysis years. They then checked how fast their sales compounded over the following 5 and 10 years. The report is called The Base Rate Book.What they found was that over ten years, only about 4 in 100 companies grew sales at 20% or more a year. The median company grew at 4.7%, and the single most common result, for about 35% of companies, was growth somewhere between zero and 5%. Nearly one in five ended the decade with lower sales than it started with, after adjusting for inflation.Now, we know that size changes the odds a lot. So, as per the study, for companies with sales under US$ 325 million, about 18 in 100 managed 20% a year for ten years, and their typical growth rate was 9%, about double that of the full sample. At the other end, no company that started with US$ 50 billion in inflation-adjusted sales achieved that kind of growth.And please keep in mind that we are talking about ‘survivors’ here. A company shows up in the 10-year record only if it lasted 10 years, and about half of all listed companies don’t.“Oh, but India is different.”Yes, I hear this every time I share these numbers in my talks. And I agree that there’s some truth in it, in two ways.First, there’s a difference in how the numbers are counted. Mauboussin adjusted all the figures to remove the effects of inflation (rising prices). Indian companies report sales that include those price increases.Think of a company that sells motorcycles. If it sells the same number of motorcycles as last year but charges 6% more for each one, its sales still go up 6%. On paper it looks like it grew, but it didn’t sell a single extra motorcycle.So, when an Indian company says its sales grew 20% a year, about 6% of that may come from prices going up. The growth that comes from actually selling more is closer to 14%. As per Mauboussin’s data, about 1 in 9 companies managed that for ten years in a row. That’s still rare, just less rare than 20% sounded.There’s one more thing. India’s economy has grown faster than the countries most of Mauboussin’s companies came from. When the whole country is growing fast, it’s a bit easier for a single company to grow too. So, I’d rather look at Indian numbers than rely only on an American table, and fortunately, we have some.And we have some of our own numbers, and they tell the same story. As per Motilal Oswal’s 22nd Wealth Creation Study in 2017, they looked at longevity. Of the 613 companies listed for the full 20 years from 1997 to 2017, only 89 grew profits faster than 25% a year. That’s about one in seven. And remember that these 613 were the ones still standing after two decades. The companies that died along the way aren’t in the count.The same study analysed how long high growth tends to last. It found that supernormal growth usually holds for only 5-6 years, and mostly in cyclical companies (businesses that rise and fall with the economy, like steel or cement) or in steady businesses early in their life when they are still small. Out of 112 companies they studied in depth, only 30 kept up 15% growth for more than nine years, and 24 of those 30 were secular businesses (steady growers like food or paint, whose sales keep rising whatever the economy is doing).Cyclicals can sprint, but they rarely go the distance. The study’s conclusion was simple: the longer growth lasts, the slower it tends to be, and the faster it is, the sooner it ends.So, what do you do with all this when you look at a stock?Start with the price. Every share price carries a guess about the future, whether anyone thinks about it or not. When you pay a high price for a business, you’re betting it will grow fast for a long time. But the base rates tell you how often that bet has worked.Say you find a “wonderful” business whose stock price is 70 times its annual profit (P/E of 70). In other words, you’re paying ₹70 for every ₹1 of profit. If profit grows 20% every year for 10 years, it will be about 6 times bigger. Now, prices this high rarely last, so let’s say that after 10 years the market pays 30 times profit instead of 70. Your share would be worth about 2.7 times what you paid, or roughly 10% a year.If profit grows 15% a year, which is still far better than most companies manage, you earn under 6% a year. If it grows 12%, you earn about 3%. A fixed deposit would have beaten you, and you’d have owned a “wonderful” company the whole time. (see calculation)Anyways, once you know what growth the price is asking for, check how often companies have delivered it. And here, remember to compare like with like. A small company and a giant have very different odds, so look at companies that were about the same size when they started. Then ask whether the business is steady, like soap or paint, or swings with the economy, like steel or cement. The Indian data shows the latter (cyclical businesses) rarely keeps growing for more than a few years.After that, let the company’s own story change your mind, but only a little. Say the crowd’s odds are two in ten. A founder you trust and a business that’s hard to copy might move you to three in ten. If you find yourself thinking nine in ten, you’ve stopped measuring and started “hoping,” which is not a good idea.Also, let the odds decide how much you put in (position sizing). If the price only makes sense when the company turns out to be a one-in-twenty business, invest as if it’s a one-in-twenty bet. A small amount lets you enjoy the upside without betting your family’s future on being right.Check once a year whether the company still belongs in that rare group. Fast growth in India tends to fade after 5-6 years, so ask whether the price you’re paying already expects that.And if you’d like to see the odds for yourself, you can do it through some work. Find the BSE-500 list from 2016 (since we are in 2026 now), since today’s list only shows the companies that survived. Pick companies about the size of the one you’re studying. Count how many grew sales by 20% or more a year over the next 10 years and count the ones that disappeared too. That count will teach you more than any company’s conference call.Anyways, coming back to the NMI airport, it did open in December 2025. But 7 years after the foundation stone and 6 years after the first deadline, which is roughly what the crowd of big projects would have told anyone who asked in 2018. The outside view never said the airport wouldn’t be built. It only said that the people closest to it were too hopeful about the date.I think about this a lot outside of investing as well. We plan our own lives from the inside too. We plan for the house renovation to get over in two months. We plan to finish the book by Diwali. We believe the new idea will work because “we know what we’re doing.” The list goes on.In The Base Rate Book, Mauboussin mentions a survey where more than eight out of ten entrepreneurs rated their chances of success at 70% or higher, while only about half of new businesses survive five years. Now, most of those founders weren’t fools. They were just looking at their own plans from the inside, the way all of us do.What I’ve come to value about base rates is that they’re kind to us. When a plan of mine runs late, the crowd tells me I’m normal, and I can stop blaming myself and start adding the margin of safety I should have added in the first place.So, the next time you make a plan, for your portfolio or your life, ask how long things like this usually take and how often they work. Then begin anyway, with a little more patience baked in than you think you’ll need.Also Read:The Base Rate Book — Micahel Mauboussin, Dec. 2015Motilal Oswal’s 22nd Wealth Creation Study, Dec. 2017Two Books. One Purpose. A Better Life.“Template on how to lead a happier and fuller life.”—Ramesh Damani, Member, BSE“Teaches you how to think, judge, and behave…”—Arnold V. D. Berg, Century Mgt.Click here to buy The Long GameClick here to buy SketchbookClick here to buy the combo (The Long Game + Sketchbook)The post Overpaying for Greatness: A Base-Rate Check appeared first on Safal Niveshak.