So what does it all mean? Well, Romney was really good at what he did. And what he did, initially, was venture capital, providing dough to promising young firms. Then he shifted to private equity, which is a) using investor money and debt to takeover a business, b) attempting to improve its profitability (which may mean cutting the workforce), and c) selling the business and, as the WSJ, puts it, “extracting fees and sometimes dividends …”

That a small percentage of the Bain deals supplied most of the firm’s gains should not be surprising. Whether you are a private equity investor or a do-it-yourself stock picker, the key is letting your winners run and limiting the damage from your losers. Recall how famed Fidelity manager Peter Lynch always said he was on the hunt for “ten-baggers” — stocks where he could make ten times his original investment. A good investor is like a good baseball hitter. A .300 average gets you on the all-star team.