[DesertCat]

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The most interesting traders to me are Cohen (SAC) and Simons (Renaissance). Both charge massive fees, have large funds and still crush the market after fees for long periods. Simons supposedly uses much less leverage than other funds. Both of these guys should be figments of our imagination according to "A random walk down wall street".

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Reread ARWDWS. Your question is directly answered in the book.

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I've read it several times. Are you talking about the part where Malkiel admits he doesn't really think the market is that efficient and tries to find inefficient opportunities in places like closed end funds for his own investments?

I think you are talking about coinflipping and that these guys are just lucky. It's easily conceivable that someone who beats the market by 1% per year for 10 years is lucky. It's not so conceivable that a guy who generates 5x the market's return for over 10 years is. Before fees these guys are averaging over 50% per year. That's a humongous return and attributing it to luck alone is silly.

If that's your argument, why don't you calculate the odds of generating those returns through luck alone, given the odds of doing 50% in a single year are already fairly small.

edit: removed inflammatory descriptor.