Subject: Re: Industry momentum
Investing suffers from the rather strange phenomenon where expending more effort does not necessarily lead to better results. In most things we do in life, when you put more effort into something, you experience improved results. With investing, that's not always clear. Certainly the obvious things (that many don't do!) help results (regular saving, asset allocation, etc.), but you start to get into very specific strategies around market timing or stock/ETF picking, then... it's much tougher to say.

I have to routinely remind myself that when you get into market strategies, you're not playing against the "average investor" out there - you're playing against people that look for market edges as a full-time job, who have time to build all types of models, collaborate with other sharp minds, etc. As a long-time mediocre 5k runner, if I went out and thought I was going to compete with the UCLA cross-country team, I'd know without question that I was going to get beaten (and badly). As an investor, I'm also competing with hedge funds, thousands of analysts, etc. - the odds of beating them (with any level of consistency)... are likely not great, if I'm totally honest with myself. Just felt like saying this - as it's been on my mind a lot lately!

I don't agree 100% with this. I find it easy to beat the fixed income market using preferred stocks, and closed end bond funds. For stocks, it is admittedly very hard. I think if you do things like using puts and calls along with your stocks, and buy DITM leaps, it is possible to beat the market, although still very hard.