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You're just assuming that no one can see trends more effectively than you. The reality is that you have no idea how other people see the world, people could be way ahead of you and you'll never know it.


For big companies thousands and possibly tens of thousands of professionals around the world are putting in long hours thinking about what the correct stock price is. They are meeting with management, buying proprietary research, and hiring PhDs to analyze quantitative data. Despite all that the market makes mistakes a lot, and sometimes a perceptive amateur might even be able to pick up on those mistakes. Still, I really doubt that many people are good enough at spotting trends to generate market-beating returns. If they could do it reliably they'd be billionaires.


What a waste, isn't it? Or maybe better put, how presumptuous to think that years of statistical modeling and formal economic theory somehow endow someone with effectively better intuition than the next person. Maybe if those years of training actually lead to better investments there would be something to consider, but you can't argue that professional gamblers are better than casual intuitive ones if the pros don't actually yield better results.


They do. The median active investment fund underperforms the market, but the median active retail investor way underperforms the market.


And the median active investment fund underperforms the market for a reason. If a fund plowed 100% of its investment into the S&P 500 they'd be exposing themselves to laughably high volatility.




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