Link: http://www.wazua.co.ke/f...spx?g=posts&t=37879

I read the thread by one Swenani above. It reeks of despondency. Swenani is just 1 in millions who have struggled to understand the maze called "markets". Markets in this context include stocks, commodities, forex, crypto etc. Swenani is categorized as a retail trader/investor. I asked myself, what are the odds of a retail investor or trader succeeding in markets?? My research has showed that over 90% of retail traders fail mainly because they have limited trading/investing knowledge which is akin to driving when blind. To confirm my hypothesis, I did some little amateur research.

Goldman Sach's trading desk is probably filled with sophisticated traders i.e smart money. I checked the performance of their trading desk for over 10 years to control for a single outstanding cohort of traders. I downloaded their 10-K files for over 10 years between 2008 and 2018. These were my findings:

- Goldman Sachs (Smart Money) consistently had over 230 profitable trading days out of about 252 trading days each year. That means that over 90% of the trading days, the firm made money as a whole.
- Goldman represents the smartest guys in the room. For them to have gained that money, guys like Swenani i.e retail traders must have taken the opposite side of their trades.
- So, retail traders make a loss in 90% of the trading days each year.
- When you factor fees to exchanges, taxes etc, the percentage of retail traders that make money consistently in markets is certainly below 10%.

There are only three ways of making it in markets. Be first, be smarter or cheat (insider trading). The markets are a bad place for the average Joe in the streets. If you are the average Joe like Mugundaman, surrender and invest in real estate. You need to be very smart to hack it in markets and most people don't have the time to put in the long hours of education and experience needed. Malcolm Gladwell's 10,000 hours to competence...most people don't have the time to learn and be competent in the skill because of many valid reasons. Staying out of the markets will serve you well if that is the case.

All markets are a casino for most people because they don't know what they are doing when participating. To the Wanjiku in the streets, the stock market etc is a casino, no doubt. If you don't believe, ask a retail investor what the company he/she has invested in made last year. That will show you just how clueless the average investor/mainstreet is. Using local examples, you cannot expect to succeed in NSE if you have no basic accounting knowledge to understand the company you are buying into at a basic level. For instance, if you don't know what a PE ratio is, you don't expect to make money consistently in the NSE.

This is so true you could be mistaken for Robert J. Shiller and his IRRATIONAL EXUBERANCE . The efficient market theorem is a false facade in the society full of information asymmetry. BUT YOU ARE FUNNY ....If you are the average Joe like Mugundaman, surrender and invest in real estate.

Despondent doesn't mean broke. You could be the richest wazuan and we wouldn't know. It means loss of hope. You have lost all hope of winning in the NSE You don't need money. You need education in security analysis if you are willing to put in the work.