If you take a monkey and have it pick stocks randomly he's going to perform in line with the market. But monkeys are cheap.
Take a reasonably knowledgeable amateur investor, maybe someone like Vintek, and you'll have the best of everything - a steady, rational hand managing his own portfolio and no management fees. I personally think everyone CAN be like that. But I also leave the door open for active managers for people who don't WANT to manage their own money.
I look at it like this - I'm a technical guy. I used to work on cars in high school as a hobby and because my friends did it. Even 10 or 15 years ago I used to work on my own cars, change my own oil, etc. I still know how to do that. But I don't really want to do that anymore so I pay others to do that now.
Thanks for the kind words, DH. I actually singled out the 3 paragraphs above because they tie in to my own investment habits. I don't actually do my own investing any more. Like you, there are certain things I'd rather be doing so I pay others for it. And as you have so astutely observed, monkeys are cheap.
Putting those 2 factors together, I had the folks at http://www.newtechusa.com/PPI/talent.asp
write programs designed to help predict when the market was going to go up or down. The result is that because it's done by monkeys, I'm pretty much getting market returns. The cost are so low that it's negligible. Well worth it, as I save a lot of time and worry.