| Edit: I am a bit sad that I got downvoted. What's wrong with a contrarian opinion? I'm not suggesting we should all pick stocks. I'm saying there's not enough data to know conclusively that one couldn't outperform the market. > What are the odds that you are of those 1%? (Hint: you're probably not in that group.) Again, this was research on day trading (for which I didn't supply the source, sorry for that). It was not about buying and holding with at least for a 5 year horizon. That's what I meant with we have too little data. Day trading is not investing. > What are the odds that you manage to pick those few stocks that produce those returns? As I've learned with poker: only play on tables where you see fish. Which translates to: only play games that you are sure that you can win. The hard part is to not enter any games that you're not fully sure about of winning. And yes, there are not many games that you can win at all. But when you see one, you go at it aggressive and win. It's easier to say than to do it (based on my poker experience). I'm not saying that people can beat the market. But I still believe even after all this that it's hard to say that people aren't beating the market. We need data of actual accounts over long time horizons. IMO that's the only way that question can be answered. Unfortunately, that's unrealistic since it's a feature that the stock market is anonymous and private to other market participants. I feel there's a feedback loop going on where everyone echoes each other that you can't beat the market. And I feel that echo is stronger than the actual evidence. Don't get me wrong, the evidence that I see is quite compelling. But it isn't foolproof and it has many gaps. It's about as compelling as the efficient market hypothesis. Yes, in general markets are efficient, but why does it take 5 to 15 minutes for information to be incorporated into a stable price? That means if you'd trade at minute 2, you're almost guaranteed to make money [2]. I don't have sources for this, but these are my observations. This is even more true in the crypto markets where academics are saying that markets aren't fully efficient. The only thing I can say with regards to the whole "you can't outperform the market" rhetoric is this: if you want to invest safely, then don't try to outperform the market. There is enough research that it's a dangerous endeavour. So is starting a startup (from a financial standpoint). However, that doesn't mean it's impossible to outperform the market, or create a great financially successful startup for that matter. [1] According to Graham, he mentions it in his book The Intelligent Investor. [2] Every time when I look at day price information and see a news event priced in, I notice it takes at least 5 minutes in many cases. It's never instant. |