Survivorship Bias

Survivorship Bias In many cases, a company that has made it through a rough patch in its existence will be penalized in any reports that come out because of survivorship bias. These reports will not show that other companies have gone out of business during the same period, as these companies are usually excluded from the report, so the surviving company looks terrible in the report because there is a lack of background information on that particular industry given. Also, this might impact mutual fund families because these funds might drop certain funds that do not perform well, giving the family a much higher rating than it should have.