[mjwhansen]

I don't have specific numbers on traders, but I do know that 80% of mutual funds underperform their benchmarks. One reason (of many) is that they're under pressure to provide numbers every quarter, or to seem like they're reacting when something short-term happens, so they sell out of positions that would have been more profitable had they held onto them.

Index funds are a great solution for investors who want to invest passively and get the market return (which averages 10% a year over the long term -- might be -20% and +30% year-over-year, though).

The thing with shorting bubbles is extremely difficult to get right, and "finding the right price" doesn't necessarily mean you're making a good decision. Amazon was trading around $300 a share earlier this year -- which many trader types saw as outrageous -- but it has doubled this year alone.

I suppose, in general, I follow the Black Swan approach: humans are terrible at predicting the future. Absolutely awful at it. But I'll take a "bet" on -- by which I mean, buy part of -- a company with great management/people and solid financials (i.e., no debt, positive revenue growth, FCF positive).