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Notice I used the word ANY, not EVERY. If you can do better than a coin flip in ANY prediction, you can make money over time. I would assume the rational perso

• cestith 10y ago
  I'd say it's better than 50% that you'll sleep tonight. It's also better than 50% that you'll sleep on a bed or couch. I guess all I need to do to make loads of money is invest in furniture companies?
  • bluetwo 10y ago
    There is no market in predicting where I sleep at night because no one is willing to take the other side of that bet.
    • dllthomas 10y ago
      So... there exist predictions where being able to do better than a coin flip does not mean you can make money over time. This is in direct contradiction to what you said above: > If you can do better than a coin flip in ANY prediction, you can make money over time. It's also not true even in the case of predictions where there is a relevant liquid market. If everyone can do better than a coin flip, then I can only make money doing better than the rest. And even if I can do better than everyone else, if it's not better enough that the earnings cover my costs I am still losing money over time.
• tomp 10y ago
  A good description of investing is, it's like a game of chess that you can win (using skill) and get $1, and after every game you bet $50 on a random (unbiased) coin flip. Clearly, you can make money over the long run. But it's incredibly easy to go bankrupt. In addition, there's only so many chess players (trading opportunities), so after a certain point, there's nothing to be gained by investing more money (e.g. Renaissance has been returning 20% for decades, but only have a capital of about $10B - they pay out the profits because it's impossible for the to invest more money using these strategies).