Non self weighting stock market strategies

[Mark1808]

I just started reading Gambling Theory and Other Topics by Mason Malmuth. First off I'd like to say discovering the works of Sklansky & Malmuth and the 2 + 2 site has been a dream come true. Fantastic material! However I must respectively disagree with his assesment that the best stock market strategies are non self weighting.

There is a problem in my opinion with comparing the stock market with other forms of gambling. First off the stock market is not a zero sum game like other forms of gambling. There is not a loser for every winner. Secondly if you believe the market effeciently prices securities (of which their has been reams of academic proof) then there is no gain from looking for mis-priced securities. Lastly, over 90% of professional money managers have failed to beat the stock market averages over the long run. These are professionals with more experience and resources than you and I and still their performace as a whole has been dismal. All of this would lead one to conclude the best stock market strategy with the best EV would be no load index funds rather than a selection of a handful of stocks. Granted, investors like Warren Buffett stand in contrast to this philosophy. But it is still my belief that most investors would be well advised to invest in a manner to approximate market averages rather than taking abnormal risks for below market expectations.