There's a theory embedded so deeply in financial discourse that questioning it feels absurd. 

The theory: more information produces better investment decisions. Access to data was once the province of institutions. Now everyone has it. Therefore retail investors should be catching up.

The theory is wrong.

Four decades of behavioral finance research, conducted using actual brokerage records rather than surveys, demonstrates that democratized financial data has reliably produced worse outcomes for the people it was supposed to help. 

Not marginally worse. Significantly worse.

The most active investors, who consume the most information, underperform passive investors by six to seven percentage points annually.

Meanwhile, Warren Buffett's office lacks a computer.

Brad Barber and Terrance Odean, finance professors at UC Davis and Berkeley, spent decades analyzing what individual investors actually do. Their data source: complete trading records from discount brokerages covering hundreds of thousands of households.

Their landmark study examined 66,465 households over six years. The most active quintile, those who presumably believed their information consumption justified their activity, earned 11.4% annually while the market returned 17.9%. The least active earned 18.5%.

More engagement meant worse returns.

Here's what makes this important: gross returns were nearly identical across all activity levels. Everyone picked stocks at roughly the same accuracy. The entire performance gap came from transaction costs generated by excessive trading. 

The information wasn't improving decisions. It was generating activity that destroyed value.

The most striking finding came from tracking investors who switched from phone-based to online trading. Before gaining real-time access, these investors beat the market by over two percent annually. 

After going online, same investors, same skills, they lagged by over three percent.

The technology didn't improve their decisions. It removed friction from acting on decisions that should never have been made.

A 2007 study tested this relationship directly. Participants predicted NBA game outcomes using statistical data. Half additionally received team names.

The results inverted expectations. Participants with team names achieved 63% accuracy versus 66% for those without. Knowledge reduced accuracy. Yet it increased confidence. 

In a betting experiment using real money, participants with additional information earned approximately 60% less.

Ninety percent believed knowing names improved their predictions. The belief was directly contrary to the evidence they were generating in real time.

Daniel Kahneman described the architecture directly: "On average people know very little about the stock market and yet they feel that they know a lot about it. People feel that they deliver alpha even if they do not."

The problem isn't insufficient information {{first_name}}. 

It's that additional information increases confidence faster than it increases accuracy. 

The gap between the two is where the damage occurs.

The smartphone era didn't just remove friction. It actively exploited psychological vulnerabilities through interface design.

Research on Robinhood quantified this. Thirty-five percent of net buying concentrated in just ten stocks. The average 20-day return for top-purchased stocks was negative 4.7%. Studies of Reddit's WallStreetBets showed positions created at peak community attention produced negative 8.5% holding period returns.

Short sellers recognized the pattern. They increased positions threefold during herding events, profiting from behavior that had become predictable.

UK Financial Conduct Authority research found push notifications increased trading volume by 11%. Gamification features, confetti animations, badges, increased it further. The platforms optimized for engagement. Engagement meant trading. Trading meant worse outcomes.

The business model and the user's interest were structurally opposed.

Buffett's office lacks a computer, calculator, and stock ticker. He has reportedly sent one email in his entire life. Living in Omaha rather than New York is deliberate: 

"If you can't think clearly in Omaha, you're not going to think clearly anywhere."

He reads five to six hours daily but is selective, annual reports and 10-Ks rather than opinions or Wall Street research. 

"We don't read other people's opinions. We want to get the facts, and then think."

Charlie Munger held only three stocks in his personal portfolio: 

"It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent."

This isn't technophobia. Buffett made billions investing in Apple. It's a rational response to cognitive limits. The brain's working memory handles roughly seven items effectively. Exceed that and decision quality degrades regardless of how much information is theoretically available.

The evidence suggests inverting the standard question. 

Not what information to consume, but what to deliberately ignore.

Democratization of data was framed as democratization of opportunity. 

In practice, it democratized the ability to act on impulse, to confuse activity with progress, to mistake confidence for competence.

I think about this constantly. Not just for investing, for trading too. The instinct to add more indicators, more timeframes, more data feeds. The assumption that the edge comes from knowing more than the next person.

The research says otherwise. Semi-ignorance, applied correctly, outperforms comprehensive knowledge applied emotionally. Simple decision rules beat complex analysis under uncertainty.

The investors who understood this built the track records everyone studies.

The investors who didn't, built the platforms everyone uses.

Something to sit with.

Talk soon, 

Atif