I think what most people are pissed at, they can't do it with their little 10k account. However, if they spent five years studying, keeping very open minded and learn risk management, one can lower their overall risk then figure out how to get others to pay for it. But who wants to study for five years? You can go to California and sell earthquake insurance, if it hits, walk away.
I can't read OP's post... have him on ignore. However... the "big brains*" behind LTCM were "stupid as a box of rocks". The smartest guys in the room can't even hope to prevail over the markets with 100:1 leverage. All it takes to "bust 'em" is a 1% noise counter-move. Gotta be a fool to hope you can get away with less than that! * A "hundred PhDs" they had behind this. Who/what could be smarter? (Well, the Fed claims to have 100 PhDs, and they have yet to see a recession "coming". Ever hear the expression, "A fool and his money are soon parted"?) Pfft!
Newton was a genius. Newton also used leverage.(?) And also Newton... Blew out Guy told to all of his students, to never again , mention any financial securities.
It's all about incentives. If nothing blows up these phds get millions a year. There is almost no downside for them.
Only difference is that he wasn't a financial/option genius like Scholes. Those people at LTCM did this for a living. But you bring up a good point. Smart people in one category often think they are smart in several other categories. [cough] Elon Musk [cough] That usually leads to hubris.