“Listen, here’s the thing. If you can’t spot the sucker in your first half hour at the table, then you are the sucker.”
People don’t seem to realize that when they sign-up for that 401k through their employer or have their union bargain for additions to a pension fund invested primarily in stocks, they are unwittingly sitting down at the table to compete against the exact same players in the exact same arena as if they were personally trading stocks, despite their protestations otherwise. These people would do well to look around at the entire financial system and ask themselves “who is the sucker at this table”. I am pretty sure it isn’t JPM or Morgan Stanley.
Every trade is a zero-sum game, and for every winner somebody has to have taken the other side of that trade. There are equal numbers of winning and losing trades, but these trades are by no means evenly distributed within the market. Think about these headlines:
Goldman’s trading desk made money every single day for an entire quarter in 2013… 63 straight days of no losses
Total number of trading days in 2013 in which JPM’s trading desk lost money: Zero
For generations now, the investing public has been the sucker at the table, they just haven’t known it.