Stock survival rate

I've been going through NNT's The Black Swan again, found something worth mentioning here.

Out of all companies making up the S&P500 since the 60's, only 75~ remain in the index in 2007. The rest (425, or 80%ish) had either withered incredibly or gone belly up. Why did the index keep rising? Inflation, and constant replacement by better performing businesses.

What does that suggest about taking upside bets in the stock market? Didn't we all learn about the business or economic cycles? I define gamblers as those who participate in a losing game. The edge sits against the uninformed, upside investors. Therefore, if you buy & hold (& hope), you're simply gambling.