You misquoted me with "active investor"; I said he wasn't an "active trader". As I reinforced by saying he was long term, he is an investor rather than a trader

You misquoted me with "active investor"; I said he wasn't an "active trader". As I reinforced by saying he was long term, he is an investor rather than a trader. Select your set of traders today. Make predictions on how they will perform. Compare with what happened. Of course we should expect them to be better than pure chance. This article itself is about insider trading, which should give an edge. And yet, the hedge fund average is indeed worse than chance investment in the market (which approaches the index). The point is: we don't know who will do well. We only know in hindsight. Hedge funds also have management fees (higher than index funds), and pay more in brokerage for their active trading. > statistical arbitrage and high frequency methods seek to identify price inefficiencies just as Buffett does, but on much smaller timescales. It’s a difference of degree, not category. A difference is the sustainability of the inefficiencies identified. Perhaps if Buffett was purely an old-school value investor, picking up discarded cigars for a few puffs, there's an argument for similarity. But (as I carefully stated in my comment), he also looks at prospects, not just value. A business with a long-term sustainable economic moat makes money at a compounding rate. Now, I think we could have a largely semantic argument about whether buying a business with those prospects is just identifying price inefficiencies. To be honest, I can't really forsee how that argument would turn out, because of course you can view it as mispricing. Perhaps I can submit: more of the work is in evaluating the prospects, than the price (maybe you can argue the same for trading); simply because of the time-scale of long-term investing, you get to keep it longer, so it's more stable (but you can argue that that's covered by difference in timescales). PS. Also, I do wonder that Buffett also has better information. His dad was a senator, and he knows lots of influential people. I don't think it explains away his success, but it would be some help.