Horie on YouTube

[beanhead]

This guy is a real 'Marmite' character, you either love him or loathe him.
Interesting what he says about investing here.

He basically seems to believe that investing is a zero-sum game. He opines at one point that a regular individual investor with their small amount of capital will never beat richer investors or institutional investors.
Very strange outlook, in my opinion, for someone who is allegedly quite smart...

https://www.youtube.com/watch?v=FLTs9YTtDeI

[RetireJapan]

Seems like a good example of how experience/talent/knowledge in one domain doesn't necessarily transfer to other domains.

One reason boiler rooms like to target doctors and lawyers: they are successful, clever, have money and tend to be overconfident.

[RetireJapan]

a regular individual investor with their small amount of capital will never beat richer investors or institutional investors

And this completely misunderstands personal finance. Don't need to beat anyone, just reach my goal

[mighty58]

Wow, that video was extraordinarily laughable. I hope nobody is actually taking this man seriously. Aside from the arrogance and the pointless pissing contest he gets into with the host over who grew up more inaka, I think the best moment was when he declared you don’t need money because the only things to do with money are to buy a house, a foreign-made car, to travel overseas, finance a lover, or to go to kyabakura?!

As to the OP’s comment though, first let’s clarify that Horie didn’t claim investing is a “zero-sum” game per se, but he was right in saying that, in the macro/broadest sense, the winners and the losers will offset each other and you are left with, by definition, the average market return (which it’s important to note is not “zero”, because the market as a whole grows). And let’s also acknowledge that he’s right in saying that if you go head-to-head against a hedge fund and their $100m USD with your 1m yen, and you are playing their game, the disparity in information and capital will likely put you at a significant disadvantage, making you more likely to be on the losing side of that equation.

The solution, of course, is to not play that game, and instead to invest in a way that guarantees you get the market return, and that is passive/index fund investing. You won’t beat the market, but you won’t underperform either. Everyone playing this game “wins”. Active investing, on the other hand, is indeed a game of winners and losers, and not everyone can win... the sum performance of all the active players will, by definition, average out to the market average, and it is indeed a difficult game to play and win on a consistent basis. You can avoid all that performance uncertainty by simply locking in the market average return by buying a low-cost index fund. Do that, and voila, you’ve just beat 50% of the active investors, including many professional investors.

Horie in the video looks at the active investment game, basically says “you can’t win, so don’t play”, and advises you to take up entrepreneurship instead. That’s a completely different discussion, and I don’t want to get too far into that, but I think most people can intuitively understand it’s a high-risk play that won’t pay off for most people as well as it did for him. The point that should have been made about investing is that you can indeed “win” in investing, by locking in the market average.

[adamu]

You can avoid all that performance uncertainty by simply locking in the market average return by buying a low-cost index fund. Do that, and voila, you’ve just beat 50% of the active investors, including many professional investors.