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Comment by jimhefferon | Hacker News Reader

He is always a thought-provoking and insightful author; thanks for the link.

I am often puzzled by an apparent (to me, anyway) contradiction: (1) individual stock-traders are (mostly always) dice-throwers, versus (2) the market figures out the correct price of the stock. Isn't the market made up of individual traders? Doesn't (2) require that, across the entire market, the year-to-year success rate not be zero?

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The individual traders' guesses are influenced by the market and by their prior knowledge on how similar stocks of similar companies performed. So the final average does depend on the values of other stocks in some ineffable fashion. Whether or not that's the "correct" price of the stock might be largely a question of whether or not you accept trader intuition as axiomatic or not.

There is no correct price. There is just consensus. The notion of price discovery is just about getting investors to share their beliefs by making offers, getting to an inherently real answer.

On average, the market grows in value because companies eventually pay dividends from profitable endeavors.

> There is no correct price. There is just consensus.

And yet Warren Buffet is fantastically wealthy. The average investment advisor, this article states, is not.

The market is a rigged place where individual traders matter a lot less than the movers and shakers which take home most of the winnings at the cost of individuals.

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