This is, arguably, evidence that people are becoming more intelligent about investing. In particular they're realizing that they (and others) are nowhere near t

This is, arguably, evidence that people are becoming more intelligent about investing. In particular they're realizing that they (and others) are nowhere near the brilliant investors that they think or present themselves to be. I think the most clear evidence of this was the bet between Warren Buffet Ted Seides, investment author and managing partner of a private investment firm. Buffet bet $500k that an S&P 500 index fund would beat the average of any collection of five managed funds (such as hedge funds) chosen by Seides. That bet started in 2007 and Buffet won, trivially. The S&P index was up 85% in that time. And the managed funds were up 55%. Perhaps more importantly, that excludes management fees. Managed funds often demand quite ridiculous fees with hedge fund managers often taking a large percent of all profits just for themselves. When accounting for the fees of the funds Seides chose, the return for an investor in his managed funds would have seen just 22% versus the 85% for an index fund. As time goes on people are beginning to understand variance. Take 'x' hot managed funds and in any given year some percent of them are going to outperform the market as a whole by a ridiculously large amount. And the next year some small percent of those that did this last year will again do the same the next year. And so on. The problem is that it seems as we extend to the time frame onward, the number of individuals or organizations that can genuinely beat the market approaches 0 -- and becomes a pretty good proxy for illegal behavior such as insider knowledge. The only thing that masks this is that each year as we lose 100 'underperforming' managed funds they're replaced by 110 new hot, amazing funds being managed by the next big thing.