That argument is a variation of the Efficient Market Hypothesis (EMH), that at any moment market prices already reflect all information available to the public. Or as the old joke goes, two economists are walking down the street and pass by a hundred dollar bill without picking it up. A little while later one turns to the other and asks "was that a hundred dollar bill on the ground?" To which the other replies "it must be fake, if it was real someone would have picked it up already."
Every graduate level economics and finance student is aware of this joke, and also know EMH with more nuance than "you can't make money with trading". There's tons of research and debate about the various forms of the EMH. But you don't have to believe anything anyone else wrote. There's plenty of data and computing software available, so anyone can try everything for themselves.
With the Efficient Market Hypothesis it doesn't matter what people think because prices end up converging on reality. Everybody crunches SEC filings and stock/bond prices follow from that. That's relatively easy, and requires very little compute.
Hotz is arguing the opposite. His argument is that the market converges to some kind of consensus price, but that price is a combination of what people think a security is actually worth but also to a large part to what participants think other people mistakenly believe a security is worth.
Crunching SEC filings won't get you anywhere anymore. You also have to reverse engineer what other people believe, otherwise you end up waiting for years (or forever) for the market to come to your point of view. And when everybody acts on what they believe other people are thinking you can spend an infinite amount of compute trying to level each other. Unless one party has the majority of compute then they can outcompute everybody else put together.
This argument (at least the way I am reading), goes deep in uncertainty modeling (Partially Observed Stochastic Games the hardest class to optimize for), stock market here used as analogy more then it is not.
Every graduate level economics and finance student is aware of this joke, and also know EMH with more nuance than "you can't make money with trading". There's tons of research and debate about the various forms of the EMH. But you don't have to believe anything anyone else wrote. There's plenty of data and computing software available, so anyone can try everything for themselves.