There is nothing much to say here really. There are people who believe they can be like Warren Buffett (stock whiz), I used to be one. Two major waves hit me however. Reading John Bogle’s and Bill Shultheis’ works; and learning about the London Inter-bank Lending Rate scandal – these made me realise that it was too costly in terms of time and too difficult to pick the right company since interest rate manipulation and insider trading would have made useless my judgment and analysis. Even Buffett’s mentor Benjamin Graham suggested that picking a stock winner requires a full time job i.e. it would have to be your day job.
Buffett himself encourages the average investor and his offspring to buy index funds instead while restricting other costs such as credit card bills. Index funds in general tend to have lower management costs since it is passively managed. Essentially, it is buying the stocks and holding them there.
See the arguments and evidence for yourself (as below). You would notice a certain consistency in the citations – the farming analogy.