Because there is demand for investment services, considerable cognitive biases at play along with wishful thinking (‘I will be the next Buffett!’), and normal profits available. After all, if no one was there taking even the normal profits, there would immediately be excess returns attracting people to the enterprise...
So your hypothesis is that some process ties all the people there needing to provide skull sweat to get normal returns (and create a market for everybody else that is efficient) works equally across all such players? It sure doesn’t work that way in any other human enterprise I can think of. Intel and AMD produce different quality chips for laptops. At the other end of tilt, Intel and Qualcomm produce very different quality of chips for mobile. The physics department at Caltech produces a very different product, research wise and teaching wise, than the physics department at USC. Writer Stephen King produces a very different quality of novel than do a thousand or more other authors populating the increasingly virtual shelves of bookstores. Even here on lesswrong, some of us write wonderful stuff which is read by many and admired, while others of us struggle to get our karma up to 1000 and then hang on by our fingernails stopping from saying what we really want to say to keep it there.
So why on FSM’s tomato-colored earth would you expect these financial creators of efficiency to all get the same results from their efforts?
And when shown the spread in effectiveness in results, to deny the evidence of your own eyes and declare it all to be the distant tail of millions of coin flippers?
It doesn’t seem like a stretch to you? It doesn’t seem that the evidence is strong that the market is VERY efficient, but that the evidence is not there that it is COMPLETELY efficient?
So your hypothesis is that some process ties all the people there needing to provide skull sweat to get normal returns (and create a market for everybody else that is efficient) works equally across all such players? It sure doesn’t work that way in any other human enterprise I can think of. Intel and AMD produce different quality chips for laptops. At the other end of tilt, Intel and Qualcomm produce very different quality of chips for mobile. The physics department at Caltech produces a very different product, research wise and teaching wise, than the physics department at USC. Writer Stephen King produces a very different quality of novel than do a thousand or more other authors populating the increasingly virtual shelves of bookstores. Even here on lesswrong, some of us write wonderful stuff which is read by many and admired, while others of us struggle to get our karma up to 1000 and then hang on by our fingernails stopping from saying what we really want to say to keep it there.
So why on FSM’s tomato-colored earth would you expect these financial creators of efficiency to all get the same results from their efforts?
And when shown the spread in effectiveness in results, to deny the evidence of your own eyes and declare it all to be the distant tail of millions of coin flippers?
It doesn’t seem like a stretch to you? It doesn’t seem that the evidence is strong that the market is VERY efficient, but that the evidence is not there that it is COMPLETELY efficient?