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The argument isn't that anyone who beats the market is a lucky unicorn, it's that you can't tell if they're a lucky unicorn or not. Beliefs about beating the ma

• nabla9 12y ago
  You and splike both made good arguments. I just want to point out that it's possible to pick out winners better than random quess if they have advantage over others. Case in point: Warren Buffet. He is good investor who has beaten the S&P 500 decade after decade. But he is not beating the market because he makes series of good decisions. He beats the market because he has structured his business so that he has several advantages that others don't. The heart of his empire is his insurance companies. They create steady stream of cash even in the bad times when company valuations are low. Buffet don't have to loan money when he finds good investment or sell his other assets when he finds good investment. This already gives him severals percentage points advantage over others and that advantage compounds over decades. Also, he is in the position where he don't have to play martingale strategy [1] to please investors, because he and his friends own so many shares in the company (he is not in the payroll, he is in the charge). [1] The real cause of the financial crisis - An MIT Blackjack Team perspective by Semyon Dukach http://semyondukach.blogspot.com/2009/01/real-cause-of-financial-crisis.html http://semyondukach.blogspot.com/2009/01/real-cause-of-finan...