Investing thought experiment
The market cap always reflect the company's equity.  Except that you cannot fix a stock price in a free market.  A company with such profit pattern would have stock price behave like present value of a perpetuity (future income stream discounted by risk free rate) Since your assumption is unachievable, there is no point in determining the logic. Yes, if your assumptions are correct then your conclusions are correct. But your assumptions are never correct, and so this thought experiment doesn't tell us anything useful.
How I recognize a silver bubble: I don't think silver is in a bubble. You state: What goes up, must come down I'm not sure I agree with this.  Yes, prices fluctuate.  But most prices generally go up over time due to inflation - somethings more than others. Was coffee in a bubble in early 2005?    If you thought so then you would have missed this:  Was gold in a bubble in Argentina in 2001?  If you thought so then you would have missed this (sorry for the mismatching chart scales):  Was gold in a bubble in Weimar in 1922?  If you thought so then you would have missed this:  Maybe US farmland is in a bubble since prices are rising rather dramatically.  I don't think it is in a bubble since I rarely hear anyone talking about investing in farmland: "It's really easy to shit on an industry sector that is having challenges without recognizing the opportunities.  Remember a couple years ago when everyone said that fast casual was destroying fast food, and that firms like McDonald's were in the shitter and wouldn't be able to compete?  Look how much of a return Burger King provided, and while McDonald's isn't out of the weeds yet they've been doing better.  QSR are getting hammered on both sides by fast casual / fast food (terms that are becoming increasingly less meaningful as fast food restaurants improve quality and experience and converge towards fast casual) and restaurants.  Competition is putting downward pressure on pricing given that consumers recognize that QSR's offer an inferior service compared to good local or chain restaurants - why go to an Applebees when you can go to your local Gastropub or something?  Look at menu prices.  Going on Applebee's website, they're selling burgers for $12-15.  Since this includes fries, that's pretty much their ARPM.  Add tip and tax and you're talking $20 or more for a meal.  You can get a burrito at Chipotle for $10, or go to a local restaurant and get a burger for probably a similar price with a more personalized experience and feel.  Applebees feels it needs to cut down on pricing because they think they are a restaurant and compete with other restaurants, and that if they have better prices than other restaurants they will succeed.  Perhaps that's true.  In my opinion it's missing the point entirely.  Pricing is an issue, but it's price *in relation to value*, not in its own right.  McDonald's has a great strategy - try to maintain prices while increasing perceived value of service.  A correct approach is two-pronged.  McDonald's started offering more ""crafted"" sandwiches, and invested heavily in McCafe.  They spent enormous amounts of money on revamping their restaurants to update them for the times.  Prices went up a little, but the perceived value for those went up much more.  McDonald's isn't simply a fast food burger joint anymore.  They're a cafe, and a restaurant offering sandwiches that could be classified as fast casual.  They've changed the value proposition while maintaining prices.  What has Applebee's done to improve the restaurant experience?  They've certainly attempted to tackle pricing with menu items like 2 for $20, and probably reducing SKU (though just speculating).  But what's different about the restaurants themselves?  When customers go in, do they feel like they did when they went to an Applebees five years ago?  That's where their mistake lies.  They need to shed underperforming restaurants as they just announced, but they also need to double down and heavily invest in revamping their restaurant experience and image.  Adding ipads isn't part of this strategy.  iPads are a great way for them to increase labor leverage by reducing headcount, but does it add to the customer experience?  Based on my last visit to an Applebees the iPad was clunky to use and the server came over just as often as before, the only difference being that he'd take our order then put the order into the iPad himself.  Lol, what's the point of that?  And given the IQ level of people going into Applebee's, and how stupid so many people are that go into restaurants, how the hell they thought people could operate these things is beyond me.  I don't know what their turnaround plan is, but they're definitely salveageable.  They can be where McDonald's is today in a couple years if they wanted to.  They need to stop trying to compete with restaurants, reduce SKU if possible, reinvest in reinventing their restaurant experience and feel, and improve their image.  What do people want when they go to an Applebees?  Something that is cheaper, yes, but also something that's a known quantity, a good experience and value for price.  Also, sell more booze." I know everything I need to know about you.   You are in favor of a tax system that doesn't apply to you.  You don't think on a macro level of the inherent effects it would have on the market,  people's 401k's, investments,  and property values.    You think short term. No thought on the viability or future health of investments.   They don't apply to you,  so why would you care?  You care because you are a self serving narcissist that deems it acceptable to raid other people's prosperous endeavors.  You have selfish interests in the guise of altruism. Ha! I'm not calling you out here, apologies if it seemed that way. Disagreements over the Internet tend to feel like attacks.  My experiences with mental health have shown me that the path toward success is far less linear than for healthy people. And because everyone is brought up so linear, many end up lost. But that's what makes mental health sufferers all the more interesting.  18 months ago I was bussing tables and thought life was over. Alongside my partner, we now employ 3 doctors and 7 other staff, treat mental health issues, and we have 2 clinics with an aim for 5 by year end. I'm in my mid twenties- life finds a way. And you're right to avoid excuses at all costs. it's kind of like a circular loop:  i think he would suggest identifying strategies/portfolio managers who have demonstrated outperformance in a persistent manner.  Thing is, that's also really hard to do.  I think empirically, MPT suffers when the market does. By diversifying, you'll only be down less. He's suggesting shooting for absolute returns -- no matter what the market does, he wants to see positive gains.  (a lot) easier said than done Given that hedge funds and trading firms employ scores of highly   intelligent analysts, programmers, and managers to game the market,   what shot does the average person have at successful investing in the   stock market? Good question and the existing answers provide valuable insight.  I will add one major ingredient to successful investing: emotion.  The analysts and experts that Goldman Sachs, Morgan Stanley or the best hedge funds employ may have some of the most advanced analytical skills in the world, but knowing and doing still greatly differ.  Consider how many of these same companies and funds thought real estate was a great buy before the housing bubble.  Why?  FOMO (fear of missing out; what some people call greed). One of my friends purchased Macy's and Las Vegas Sands in 2009 at around $5 for M and $2 for LVS.  He never graduated high school, so we might (foolishly) refer to him as below average because he's not as educated as those individuals at Goldman Sachs, Morgan Stanley, etc.  Today M sits around $40 a share and LVS at around $70. Those returns in five years. The difference?  Emotion.  He holds little attachment to money (lives on very little) and thus had the freedom to take a chance, which to him didn't feel like a chance.  In a nutshell, his emotions were in the right place and he studied a little bit about investing (read two article) and took action.  Most of the people who I know, which easily had quintuple his wealth and made significantly more than he did, didn't take a chance (even on an index fund) because of their fear of loss. I mean everyone knows to buy low, right?  But how many actually do?  So knowing what to do is great; just be sure you have the courage to act on what you know. OK, VERY glad you get that idea!  The problem with the ETF is: it's the monkeys-throwing-darts method. If the average (dollar-weighted) member stock in the ETF goes up, you win, but if half of them go under, and half succeed, over some time periods you will lose (and win over others).  I guess my POV is: if you can't do serious research into the expected success of an individual company, maybe it's too risky to even try betting on the whole group. YMMV. The problem with your investment plan is: you are depending on luck, and the assumption the group will increase in value over your investment period. I prefer research over hope. It isn't the first initiative (see link below) and maybe this one will stick around.  Time will be a good test.   Here is an article on it.... http://www.investopedia.com/articles/active-trading/020515/how-robinhood-makes-money.asp  They plan to make money off unused balances - so they hope to get the masses signed up using the 0$ fees.  Also, no type of advanced trading, just limit and market orders.   Think of it this way - even if someone puts in 100$ and buys a stock at 88$...that 12$ sits there.  Multiply that by say....200,000 accounts and then do a basic 3% return on that.   Also, they plan for margin accounts in the future.   Time will tell....  sort of like I use Acorn right now (but it charges a fee to invest - a slightly higher than normal one). I signed up for fun and am just letting it ride.