This is what passive traders tell themselves to feel better about letting institutionals have free reign with their money. If there was a best strategy basic economics would tell you that it immediately becomes not the best strategy.
A trader with experience, working in a firm with deep pockets and terabytes of historical data and FPGAs that can execute his/her strategy and a legal team and an engineering team... can outperform you yes x)
But I should say that any engineer familiar with the AI tech stack could have bought NVDA at any point in the last five years knowing how big their moat is. That same engineer could have sold monthly covered calls, taking 5 minutes out of every month to do so.
And before you say it, no, they wouldn't be full port NVDA.
Extrapolating from past data with N=1 to demonstrate that "any tech person can outperform the index" shows a crass lack of mathematical reasoning, which in my opinion demonstrates why you're unsuited to professional trading.
> The Medallion Fund, which has been available exclusively to current and past employees and their families, surged 80% in 2008 despite hefty fees; the Renaissance Institutional Equities Fund (RIEF), owned by outsiders, lost money in both 2008 and 2009; RIEF declined 16% in 2008
A cynic in me would say that Simons used a better strategy for the Medallion Fund than for the RIEF.
REIF just lets them use Medallion as marketing while getting those sweet AUM fees on a massive fund.
However, active investors have higher trading fees/management costs, so they are bound to perform at least slightly worse on average. It's just mathematics.
Index funds work because not everyone buys them, they work because the majority of capital is allocated and constantly being rebalanced in a way that tries to reflect the performance of a corporation. It's only in this circumstance that an index fund, or any kind of passive investment, can be of any utility by leveraging the work of those who are actively trying to assess the genuine value of a corporation.