Yes. Buffet buys market leaders, and he buys a significant amount so that his voice will be heard. If the company starts to wander away from profitability, he’ll show up at the stockholders meeting shake up the board of directors. Remember what he did with Coca Cola.
There are many, many different ways traders make money. The MIT PhDs could be running models to capture tiny fluctuations in the spread amongst various maturities in the German bond markets. They probably have the computing power and brain power to exploit that arena. They have an edge there. The “dumb guido” might trade cattle futures all day, every day. Though he can’t give you a statistical model for it, he has a feel for the order flow. He might be able to recognize when larger than normal orders are coming into the market. Based on his intuitive feel and experience, he could choose to trade with or against the institutional order flow. He is extremely focused in that one market and he has an edge there.
For the PhDs, trading is approached from a more analytical, numbers-based point of view. For the cattle trader, it is a performance based activity, much like a sport. It’s impossible to know or explain how every successful trader trades, but I’d say it’s safe to say if they have a legitimate edge, they aren’t selling in on TV for $50.