People bet on slot machines too. Can you say, if it were a sucker's bet, most people wouldn't take it?
When I started writing I thought if I proved X was a stupid thing to do that people would stop doing X. I was wrong. - Bill James
For some measure of 'sucker-value', seeking alpha is a sucker's bet, or timing the market is a sucker's bet, or blackjack is a sucker's bet, or poker is a sucker's bet. But there are the few who can find an edge, and don't play when they don't.
A more nuanced point of view is that the market is efficient enough and perverse enough that it takes an unusual ability to find alpha, or time the market, or to pursue any strategy. So if you don't have those, then it's a sucker's bet.
As a thought experiment, consider what would happen if (nearly) everyone indexed. Anything outside the index would be super-cheap and illiquid, and the index would be expensive in comparison. In that case, non-indexers would outperform. (Efficient market theorists would of course argue it was an illiquidity and risk premium and the market is still efficient.)
In the real world, the market finds an equilibrium between indexers and non-indexers where some can generate alpha, enough to persuade a lot of people that they're alpha generating when they are just fooling themselves. It's really people's ability to rationalize and fool themselves that explains the persistence of alpha-seeking strategies, not their success.
Paradoxically, when dumb money acknowledges its limitations, it ceases to be dumb. - Warren Buffett
I agree with you that it's possible, but hard to outperform, but mostly for a different reason. Partly because the market is somewhat efficient and rational, but mostly because where and when it's irrational, it inherently mirrors the irrationality of the human participant in ways which almost everyone will struggle in vain to overcome.
When I started writing I thought if I proved X was a stupid thing to do that people would stop doing X. I was wrong. - Bill James
For some measure of 'sucker-value', seeking alpha is a sucker's bet, or timing the market is a sucker's bet, or blackjack is a sucker's bet, or poker is a sucker's bet. But there are the few who can find an edge, and don't play when they don't.
A more nuanced point of view is that the market is efficient enough and perverse enough that it takes an unusual ability to find alpha, or time the market, or to pursue any strategy. So if you don't have those, then it's a sucker's bet.
As a thought experiment, consider what would happen if (nearly) everyone indexed. Anything outside the index would be super-cheap and illiquid, and the index would be expensive in comparison. In that case, non-indexers would outperform. (Efficient market theorists would of course argue it was an illiquidity and risk premium and the market is still efficient.)
In the real world, the market finds an equilibrium between indexers and non-indexers where some can generate alpha, enough to persuade a lot of people that they're alpha generating when they are just fooling themselves. It's really people's ability to rationalize and fool themselves that explains the persistence of alpha-seeking strategies, not their success.
Paradoxically, when dumb money acknowledges its limitations, it ceases to be dumb. - Warren Buffett
I agree with you that it's possible, but hard to outperform, but mostly for a different reason. Partly because the market is somewhat efficient and rational, but mostly because where and when it's irrational, it inherently mirrors the irrationality of the human participant in ways which almost everyone will struggle in vain to overcome.