If we all just bought indexes, of course, none of that would happen, capital would be divided conservatively according to the index manager. So at a higher level, there has to be some strategy that works beyond a brain dead index one, or markets wouldn't be successful at all. There must be some smart players out there that are doing efficient capital allocation (maybe not day traders, maybe not most of us, but someone...).
> There must be some smart players out there that are doing efficient capital allocation
Right. Either that, or they're encouraging day trading from behind the scenes (which would totally explain the financial news networks). And that's why the system frightens the shit out of me.
No, value investing means you buy companies that you believe are underpriced for whatever reason [0]. Its an important distinction.
Value investing does involve investing in companies you believe in, but that belief stems from research and a deep understanding of the market and intrinsic value of the company you are investing in.
The more you truly know prior to investing, the better your investments will likely perform. The key is to eliminate areas of uncertainty (which may ultimately be gaps in your own knowledge).
I don't think this is it. In fact, I think it's the exact opposite. I think risk aversion is what's justified by default. You don't need to defend being steadily employed or your lack of interest in stocks. It's the reasons people give to take risks that most of us are challenging.
Stock trading is gambling. It just is. So to deny it's gambling is already a red flag. To say you have more information than other people is another. And to say you're smarter so you're okay, well, maybe you are, but no one is smart enough to compete with those who cheat. And if you're cheating, none of these comments apply to you.
So for those who insist day trading is profitable, the empirically backed scientifically proven answer is simply, no it's not. And that's why it's so easy to knock on those who disagree with this claim. Yes, people make money, but so does every single person who continues to gamble. If you never won, you wouldn't keep gambling.
But to be fair, for entrepreneurs, it's the decision to not have a steady job that needs defending and that is analogous to the irrationality of the day trader. They may claim it's a great idea, but the empirically backed scientifically proven answer is, no it's not.
But I think a key difference in values is that entrepreneurs feel like they're actually building something. They value their work. And that's where you just have to agree to disagree. Passion is not an opinion.