> Lots of people are highly incentivised & therefore trying really hard to predict the future, and this is what makes capitalism an efficient resource allocator.
It seems a majority of those (highly-paid) people incentivised to predict the future seem not to be that good at it?
FT: "Active managers fail to beat the market again"[0]
FT: "Only a third of UK-based active equity funds outperform passives" [1]
FT: "Three-quarters of stockpickers lagged US market last year"[2]
FT: "Active funds underperformed during Covid market stress, watchdog finds"[3]
You missed the point entirely, which is a bit sad for the amount of effort I put into writing all that. It is right there in the bit you quoted. Individuals may do poorly or they may do well. The market as a whole, as you point out, is likely to do better than individual investors. The reason the market does well as a whole is that individual correct predictions are rewarded and incorrect ones are not, and there are a lot of people guessing. The smart ones tend to use more money and account for a lot of the market's overall intelligence, and the small fish tend to be dumber, so you would expect a Pareto distribution of performance of individual investors.
If your evidence that people aren't making good predictions is that the market itself does better, then... who do you think the market is made up of? It's just more people!
Are you really trying to argue that people aren't trying to predict the future when they buy a stock? Or are you just butting your head against these concepts and getting nowhere?
It seems a majority of those (highly-paid) people incentivised to predict the future seem not to be that good at it?
FT: "Active managers fail to beat the market again"[0]
FT: "Only a third of UK-based active equity funds outperform passives" [1]
FT: "Three-quarters of stockpickers lagged US market last year"[2]
FT: "Active funds underperformed during Covid market stress, watchdog finds"[3]
[0] https://www.ft.com/content/7e4c0d91-8b6d-419b-9be3-80131d5cb... [1] https://www.ft.com/content/06317e0e-b6bf-4fdc-9255-cf664cb92... [2] https://www.ft.com/content/d1f96d83-1a72-47d7-a4af-2483bd49b... [3] https://www.ft.com/content/fbb3d1e7-f5a7-41fc-95c7-d7bf20e3c...