In the video Prof. Shiller cited a study in Taiwan that showed than only 1% of the day traders that made money. This study was conducted by researchers from UC Berkeley and the report is found here[Link].
"Most day traders, especially heavy day traders, lose money trading. Why do investors engage in such a wealth reducing activity? One possibility is that investors simply find day trading entertaining. Undoubtedly some investors do find day trading entertaining, but can entertainment account for the extent of day trading that we observe? Day traders with a minimum of $NT 90 million in our six month ranking period incur average daily losses of $NT 7,338 during the subsequent month. On an annual basis this is equivalent to slightly more than $NT 2 million, over five times the average annual wage in Taiwan and two and a half times the mean annual salary for employees of financial institutions. "
- Do Individual Day Traders Make Money? Evidence from Taiwan
In the US the SEC has set out to warn investors as well as punish firms that use deceptive techniques to lure investors into this form of trading[Link]. In Singapore we not allow people like Clemen Chiang to peddle and enccourage people to engage in harmful forms of gambling using poorly conceived strategies, brokerages are allowed to offer something known as contra-trading. This form of short term trading in which the trader puts no money down to purchase stock which he has to sell within 5 days is allowed only in 2 countries in the world because it is often associated with gambling. Our authorities do nothing about these things because they believe that part of developing our capital markets is to keep trading volume high even if it means having hundreds of thousands of people engaged in activities akin to gambling. But really if we do not educate people and have better regulation what we will end up with is not a financial hub but a big casino.