Yes of course if someone is able to pick the exact stocks that will go up the most then they will do wonderful. The problem is that it is impossible to know which stocks are going to succeed or fail.
Also the Bill & Melinda Gates foundation is estimated to be worth $69 billion. And probably most of that has come from Bill Gates.
It's a bit easier to spot systematic fraud when you're the plurality shareholder, founder and former CEO of the company.
Seeing the future is hard.
No one is a winner forever. MS is still going strong, but for how long?
Yet casinos make money despite not knowing the outcome of each game.
You only need to be correct more times than you are wrong (in $ space, not number of trials).
Nobody knows the odds a company will profit or lose money or by how much, or if they will go bankrupt, merge with or acquire another company, experience hostile takeover, scandals, be mistaken for the wrong ticker symbol like Zoom, become the target of meme gamma/short squeezes like Gamestop, become the target of antitrust investigations, etc.
Do you think companies randomly decide merge? Do you think antitrust investigations are random? The SEC flips a coin every morning?
The markets are proven to be NOT efficient. Now, for retail traders like FAANG SWEs, the markets are practically efficient.
I was going to lead with "if you have some insider information and can use it without being charged with violating insider trading rules, you can do better than most", but that seemed more pertinent.
Buuuuut you also have people who hear the magic words "won the 1997 Nobel Memorial Prize in Economic Sciences", turn their brains off, bet everything on a misunderstanding, and after a few good years suddenly find that all the money evaporates everywhere at the same time. This is relevant to the quoted passage:
> Nobody knows the odds a company will profit or lose money or by how much, or if they will go bankrupt, merge with or acquire another company
(Also, is it my imagination/pure coincidence, or are you the same person creating a lot of new accounts that each has only one or two comments?)
Of course not. But the people that can actually gain from such knowledge presumably aren’t able to use it to make decisions on whether to buy or sell stock. That’s the opposite of the position casinos are in.
> the markets are practically efficient
I’ll just echo the original comment you replied to in this chain:
> > Tell that to the Enron employees who had all of their retirement 401k in Enron stock.
Not to mention dot com bagholders.
Stock exchanges do not use probabilities.
They have (mostly) fixed trading fees.
I worked with casino clients for several years. Casinos know exactly how much of each game they’ll win. They will break even on poker and have small margins on blackjack. The majority of money is won on slots, bing and video poker. Table games just get people in the door.
Each game? No. Stay at the machine and table long enough and their confidence you'll lose approaches 100%. They then "diversify" that over many players and nudge even closer to 100% certainty.
Put another way, no one - not even the state - is fighting to get out of the gambling business. There's a reason for that.