

Warren Buffet explains why you can't beat the market - xSwag
http://boingboing.net/2013/08/17/warren-buffet-explains-why-you.html

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lutusp
> Warren Buffet explains why you can't beat the market

The article's title is misleading. Buffett's memo explains _that_ you can't
beat the market averages, but not _why_. I have no doubt that Buffett is right
-- that a conservative, buy and hold position in an index fund is the most
effective way to make money in equities -- but his memo doesn't go into detail
about _why_ this is true.

The _why_ is easy to state -- if a method existed that reliably improved on
market average returns, either:

A. It wouldn't remain secret for long, then everyone would practice it, and
that would become the new market average performance, available to everyone.

B. It _would_ remain secret in perpetuity, the lucky secret-holders would
drain the market of its capital and its attractiveness to average investors,
and businesses, smelling a rat, would refuse to raise capital using equities.
The market would collapse.

Therefore there are no "secrets of the winners", those much-touted investment
books are worthless, and the most boring, geriatric kind of investment, like
an index fund, is the most efficient way to grow your money.

