- What good are professional investors if they can't reliably beat the market?

- What good is all this overanalysis? Simple = better

- Isn't xyz an obvious buy/sell?


There's a ton of misconceptions out there about investing, many of which involve questions like the ones above. A big part of the problem is in the way that people view investing. They see it as something akin to professional basketball players playing against your average Joe. If you're in the NBA, you should be visibly dunking on other guys, right?


In reality, investing needs to be seen as something akin to playing poker. Professional poker players assess their odds of winning and attempt to exploit the odds in their favor in the long run. Does this mean that they will win every time? No, but they should be winning over the long run as they consistently take bets with the odds in their favor.


Let's dive a bit deeper into this analogy. In poker (Texas Hold Em), there's quantifiable odds and specific tidbits of information that you might have. Let's take extreme examples. The worst hand in poker is a 2 7.  Before even seeing the flop (the cards that will come down), you will reliably want to fold this hand and not make bets on it. Why? Because your odds of winning are already very low. Even if you get a pair, chances are someone else will have a pair and it will be higher than your own. 

Stocks can be seen in a very similar way. For every stock, there are 



every stock, at least on a somewhat deep level, is priced in a way where the upside and downside are equal. perhaps not equal in chance of it occurring, or even magnitude, but equal when considering both chance and magnitude.