[soVeryTired]

Ok, fair enough. The coin flipping analogy isn't great. But it's a pithy way to make a very valid point: there's a massive amount of luck in investment. To see this, let's think about coin flipping again :).

Suppose I have a 90% chance of making a positive return in any given year. The chance that I'll make money every year for ten years is about 35%. Over 20 years, it's about 12%.

Now, I don't believe that anyone has a 90% chance of making money in a given year. Even if I conceeded that it's possible to have a long-term edge in the markets, I'd say it's more like a 55% chance of making money. So instead of there being a handful of elite geniuses with a 90% edge, I think it's more likely that there are many smart people with a 55% edge, all tossing coins.

I've hidden a lot of things away in this analysis, and I'd need to write a full essay to give the issue its due. For example, I've ignored the possibility to "beat" the market by leveraging up your S&P exposure and charging fees on top. If the S&P goes up, you beat it. If the S&P goes down, you blow up and start again.