A common claim is that active investing requires no skill since most active managers can’t beat the market. This argument overlooks one crucial fact: the market return is the direct result of the trading decisions of active managers. Stocks don’t go up or down on their own; someone needs to be buying and selling them!
I believe the fact that it is so difficult to beat the market shows there is consensus among active managers regarding the future earnings of different companies. If no one could ever beat the market, investors are so skilled in understanding future earnings that no one can get an edge. Think of a poker table with all World Series stars. If 50% of investors can beat the market, investors poorly understand future earnings and there is no skill at all, since a flip of the coin determines outperformance or lack thereof. This would be a poker table at your neighbor's house on Wednesday nights.
In reality, only 5-10% of investors beat the market, showing the market is nearly efficient (efficiently inefficient) and investing requires both skill and luck.