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PaperclipPerfector  1mo ago (text post)   2954 thread views

Friday Fun Thread for March 27, 2026

Be advised: this thread is not for serious in-depth discussion of weighty topics (we have a link for that), this thread is not for anything Culture War related. This thread is for Fun. You got jokes? Share 'em. You got silly questions? Ask 'em.

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About 1% if even that, I believe.

I think you have over-corrected here. It's more like 5-15% before fees and 5-10% after fees. They (professional investors and fund managers) are largely, in Peter Lynch's words, 'oxymorons', but it's not quite as bad as you suspected. Funnily or appropriately enough, the percentage lines up almost exactly with the percentage of amateur traders who succeed consistently. Yet so-called professionals and those with credentials are consistently awarded more credibility and respect.

That isn’t quite true. “Amateur investors” includes everything from sensible people who manage their 401ks with a little panache and a slight preference in sector exposure to “day traders” of the WSB type who gamble on far out of the money options or who put their life savings into heavily leveraged short ETFs.

Among the latter, most data shows perhaps 1% make money consistently, far below professional active managers. In addition, their losses are far higher, while many active managers (loathe as I am to defend them) only marginally underperform the market.

That study regarding 1% of retail traders being profitable doesn't account for positive churn. if your account is profitable next thing you know it's shut down and either 1] run at a fund 2] done through a different entity 3] both. so you're only left w the weirdos w profitable accounts who don't go pro

I don’t think it’s very common for even the tiny minority of successful retail traders to join a professional fund, the approach to risk management alone would make that a compliance challenge at the best of times. It has happened, but far more common is what Jane Street, Two Sigma etc do (as far as I know) where they pay savants for trade ideas directly. There are quite a few basement dweller math geniuses who make a living that way.

I did not say amateur investors (the larger group). I said amateur traders, who attempt to take their activities quite seriously. Around 10% of them succeed consistently, afaik.

What separates a trader from an investor? You can discuss this professionally (traders execute to balance liquidity, market depth, optimize, PMs strategize, order etc), but its not relevant to amateur investing where the PM/trader distinction is definitionally irrelevant.

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