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0 pointsstouset8y ago0 comments

That is an absolutely gargantuan “if”, given that any particular retail investor is overwhelmingly unlikely to possess novel knowledge or insight in any market.

The number of times this ever happens is outweighed a millionfold by the frequency of times where people incorrectly believe this to be the case.

What happens in the vast majority of cases is that people believe they’re making money, but after fees are actually losing to index funds. Or people believe they’re making money, but lose their shirts the moment the market turns sideways. Or people do succeed due to completely random chance, but the level of risk they took on to make that return is significantly higher than other investments with comparable returns.

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smileysteve8y ago

> given that any particular ~~retail~~ professional investor is overwhelmingly unlikely

Reminder from Random Walk Down Wall Street; Professionals rarely beat the S&P 500 Index on a time horizon. It's statistically likely, that if a professional fund does beat the index one year, then it will underperform the next year.

omarforgotpwd8y ago

That's true, most people likely won't know what they're doing. But it's possible to spend some time, pick up something like The Intelligent Investor by Ben Graham, and invest a little yourself. Ordinary people can sometimes have investable insights that most players in the market are not aware of.

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