Sat Feb 6 "Index Funds, Dowdy to Some, Get a Notable Endorsement"

This story in the New York Times, Sat Feb 06, by Paul Sullivan, talks about how a well known economist recommends index funds.
A principal argument for index funds is that no one actually knows how to picks stocks, so rather then pay high fees, you should get an index fund which has low fees
For Balance, Mr Sullivan presents quotes from Mr Tierney, who represents funds who justify their high fees by arguing that they have superior stock picking skill.

The story says [slighly edited]
"Mr. Malkiel has long said that no one can consistently pick winning stocks and bonds. He argues that index funds are the best, low-cost ways to invest money you will need.

There are plenty of dissenters to this view. James T. Tierney Jr., a senior VP at W. P. Stewart & Company, which has $1.6 billion invested in 15 to 20 stocks, equated indexing to judging baseball players against the league average. “It’s like saying all hitters hit .275,” he said. “That’s not the case. Some hit .325 and some hit .200. If you find the ones with the higher average, you’re adding real value.”

…Mr. Tierney [argues ]that W. P. Stewart’s concentrated approach to stock picking serves high-net-worth investors better. “We’re selecting high-quality companies with earnings streams and eliminating all the bad stocks in the S.& P. that you have to own because it’s an index,” he said.

Mr. Tierney pointed out that his strategy has consistently beat the Standard & Poor’s 500-stock index. Since the fund’s inception in 1974, it has outperformed the S.& P. in its 28 positive years, 23.3 percent to 19.9 percent, and in the index’s seven down years, negative 2.9 percent versus negative 13.7 percent"

Now, why is this a demonstration of innumeracy ?
Although Mr Tierney has beaten the SnP since 1974,that is after the fact

Mr tierney states that this is because of superior stock picking skill.
But there is an alternate proposal: his "superior" skill is a statistically expected result, because back in 1974, a lot of funds started. If we had looked at those new funds, with no track record, we would have expected some to do well and some to do poorly, just based on random chance.
It is exactly like playing poker or bridge; if you draw enough hands, you will get some good ones and some bad one.
I argue that Mr tierney happens to work for the fund, that by chance, did really well. this is the simplest occam's razor explanation, and it fits very well with a lot of data, that you can look up if you are interested.

I further argue that it is up to Mr Tierney to demonstrate that he is not the lucky fund;