Do you know anything meaningful about 20% of the companies in the SPX off the top of your head? How about 10% of those in the RUT? Can you even rattle off what is in the Index. Mere mortals can't possibly know anything meaningful about that amount of stocks. You don't know what their competitive advantages are or aren't. You don't know anything about their management. You don't know which ones are going to go bankrupt. You can't possibly know enough about all of them. Hence Buffett says “Diversification is protection against ignorance.”

Mutual funds, in general, are even worse. They have such pressure to beat the market to justify their fees. Moving so much money becomes really tough, because they are pressured into short-term quarterly returns that have to stay close to the market. I agree with you. Stay away from large mutual funds. That's why Buffett closed his fund early on as it got huge and bought Berkshire.

Buffett wasn't investing in 1920, but his first mentor Ben Graham was destroying the market. At the end of 2018, BRK had returned 2,472,627% since 1965 (20.5% Annually) where the market did 15,019% (9.7% Annually) since 1965. That's a pretty decent market beat and considering how much money he is dealing with makes it just incredible. 

We believe a policy of portfolio concentration may well decrease risk if it raises, as it should, both the intensity with which an investor thinks about a business and the comfort level he must feel with its economic characteristics before buying into it.

-Warren Buffett

Look, I used to think as you do. I went to business school too. I know Burton Malkiel and his efficient market (that prices in all information at all times--except for when it doesn't) I heard the same thing from the Stice brothers (the accounting guys), whom I love and admire and are just amazing. They say the same thing about Buffett, that he's got all this inside knowledge, which I agree. However, he did way better from a returns perspective in the early years based on those strategies he has divulged through the years, and they continue to work for him, except he is much more limited on the deals he can do, they have to be "elephant sized."

There are so many others that have done the same thing as him and done even better, albeit with less money. This is a great read, check it out. Like so many. And, they give away all of their knowledge. 

I'm mostly agreeing with you, that timing the market is a stupid thing to do. That most people aren't going to be cut out for investing and they should just bet on America by putting their life savings into indexes through thick and thin and then retire when ur 60 or whatever. However, I have a different view and experience on the following two points:

1. To poo-poo the idea of having cash ready to take advantage of deals that you are looking for and ready to buy at the right price, shows that you have a perspective way different than Warren Buffett and many others and more in line with Business Schools. This is the very essence of investing throughout all the ages.
2. Saying that no-one beats the market is not right.