system
Given the following post, respond as if you're commenting on Reddit:
human
How exactly are finance guys getting so rich off of stocks if it’s not a sustainable financial strategy to “pick stocks”?

Are these people just the lucky ones who managed to pick the right stock? What does the current literature say about financial asset picking vs passive investing?
gpt
Firstly, holding every single stock in the S&P (i.e. an ETF) delivers a 10% return yoy on average since 1980. So if you invested $1000 in 1980, you would have $45,000. This is called beta, and you don't need to be a financial expert to generate this.

Secondly, theres a major survivorship bias, because you only see the successful people. If you organised a rock paper scissors tournament where two people faced off and only the winner advanced to the next round, then starting with 1024 people after 8 rounds you only have 4 people. These 4 people would have won every single round in the last 8 rounds, and they must necessarily exist. If you only observe these 4 people and they tell you all about their funky superstitions like maybe one of them only ever plays with his left hand, then you might think they've got some actual technique. But they don't.

Finally, just because it's not a sustainable strategy for you doesn't mean it's unsustainable for other people. Genuine edge does exist, if you can find a reason for it. A great reason could be that you have data that no one else has because you're a specialist in a certain technology that no one knows about. Another great reason could be dislocation when a bond transitions from being investment grade to non investment grade, and investment grade investors have to sell it.