[hedgeyerbets]

Some answers...
(1) Mutual fund managers manage a LOT of cash. It's a lot harder to find, say, 5 billion dollars worth of good investment ideas than it is to find 100k worth. Buying enough stock to fill a mutual fund either means that you are restricted to mega cap funds, or you have to be content to have to pay a few percent more and sell for a few percent less (b/c you will move the market by making huge transactions). Look at the top holders for a couple of big stocks. Fidelity, for example, is one of the top 10 holders for a frightening amount of stocks.
(2) Even without these disadvantages, it remains tough to beat the market. There aren't many stocks that are obviously mispriced by a large amount. Unless you have done a lot of research and think you have some edge on the market at large, it is NOT worth buying individual stocks.