Maybe I'm misunderstanding, but there's no blood from the pessimists since they don't really lose what they have. They just miss out.

There used to be a saying, something like if you missed the best 20 days of the market in the last century, you would just about break even.

Missing out is very, very expensive.

If you miss the best 10 days in the last 20 years of the US market, you lose 2/3 of the gains. If you miss the best 20 days, you are slightly underwater. https://www.fool.com/investing/2019/04/11/what-happens-when-...

People do short or buy put options.

Short squeezes, sure. But they're not pessimists. More like cynics. In fact, today's most famous short seller, Jim Chanos, runs a firm called "Kynikos" (Greek for "cynic").

Apart from short squeezes, markets generally grind higher and crash lower. The left tail of the distribution is usually the thicker, meatier, juicier one. But the mode is usually slightly positive. So it's not usually the blood of cynics, but rather the patience of optimists and the persistence of hard workers, that brings markets higher.

So do the meager realists get to avoid bloodshed? Or, better yet, capitalize on the blood of pessimists and optimists?

Rarely! They're mainly collateral damage that gets hurt during the downturn AND the upswing.

The real money is in collecting some % of the money invested as fees.

Realists miss out on volatility

Hodl, fren. Hodl.

The relevant xkcd: https://xkcd.com/2270/

Maybe "tears" works better..

count me into that bucket. I know of many other too. :-(