> There's no point in trying to game or predict [the market] at the scale of an individual investor, unless you enjoy the thrill of gambling.

I don't agree with that, either. You can expect the value of stocks in general to go up over time in proportion to the growth of the global economy, which has been broadly predictable since the industrial revolution.

You can also hedge risk; not all investments are about making money.

Finally, you can certainly outperform the market if you have expertise in a certain sector of the economy.

Your complete dismissal of all investing as "gambling" is flippant and incorrect.

Warren Buffet is wealthy for a reason.

There is a kernel of truth in what you said if it is restated as: amateur investors should not expect to outperform the market.

Warren Buffet started and made much of his fortune when there were more inefficiencies in the market. It's not clear that the same method would work today.

With all of he data and speed that goes into trading, it's pretty unlikely that you have an informational edge unless you're able to pay for more data sources than everyone else and you have an army of humans looking for patterns for you. That is you need to spend a great deal of money getting that edge. Presumably that is somewhat what Renaissance is doing.

Even then you have to deal with the fact that insider trading is essentially instantaneous with modern communication and trading platforms.

If you want to play that game you have to compete against large firms that have buildings full of people looking into the fundamentals of the companies. Or you need some other informational advantage.

Otherwise you are almost certainly buying correctly-valued stocks. That's not value investing, but you can do something else that is useful, like buy an index.

For one thing, there are lots of companies I can buy into that Warren Buffet can't, because he can't take a meaningful (to him) position, because he would end up owning the entire company. And even that may not be enough to be meaningful to him.

I suspect this phenomenon also exists for firms and institutions much smaller than Buffet. It may not be that they would own the whole company, but simply that they would own too much of it and/or move the price on their own.

For another thing, lots of investors are irrational. They follow fads. There are certainly opportunities for contrarians.

Value stocks have underperformed in the last 12 yrs, but these things tend to follow cycles, so I'm guessing they will have a comeback. Here is an article about that: https://www.wsj.com/articles/the-agony-of-hope-postponed-by-...

> you can do something else that is useful, like buy an index

That is precisely not useful in terms of efficient price discovery, though it may be "useful" to the individual investor who has better things to do with his or her time. That is one kind of behavior that causes inefficient markets that careful investors can then exploit.

It's what the vast majority of people and businesses do with their money. Only a small percentage are investing in risky trades. And the ones that do that have plenty of money to spare and are well aware of the risk models.

The vast majority of people invest in founds that deals with short-term gambling. Heard of LTCM?

I really doubt that.

What does that have to do with the average investor?

Not really. Exhibit A: Follow realDonaldTrump on Twitter. Look what happened to the SPY index starting at 13:26 EST on 8/1/2019.

[A] https://twitter.com/realDonaldTrump/status/11569794468779622...

SPY -> https://i.imgur.com/MDp7zHS.png

Even if it took you 10 minutes to decide to short the SPX/SPY on that information, a leveraged trade made plenty of money over the following days.

There is an abundance of free information available these days. To people who hone their market discernment the edge is arguably more accessible than ever.

If they moved against, and had reasonable risk management, it should minimize losses.

Is it because of luck? Not trying to be silly, but how would you truly know it isn't just luck? E.g. read Fooled by Randomness for more background.

In general, though, if you look at mutual funds and hedge funds, I suspect that a lot of the winners and losers can best be explained by random luck. So in that sense, I agree with you.

I haven't read Fooled by Randomness yet but it's on my bookshelf ;)