[magnamerc]

I've heard recently that we can expect lower returns in the 21st century, on the order of 5%, simply due to more efficient markets. It makes sense given that information spreads more rapidly today which in turn reduces informational advantages. I like the following poker analogy, even if it's not a perfect one.

The markets in the 60s, 70s and 80s were like poker tables with plenty of fish and few sharks. The sharks came out with bigger returns due to asymmetrical informational advantages which resulted in exploitation of mistakes. Today, the tables are full of sharks which means less mistakes and smaller returns.

Intuitively, this makes sense, since market gains are really just market valuation errors.

[Misdicorl]

This doesnt make any sense. Short term trading gains/losses fit the poker table metaphor. The market as a whole is pretty insulated from those dynamics over longer than ~3month timescales.