Basic fact (if the video is correct lol): 96% of stocks perform significantly worse than treasury bills. [pareto principle: a very small proportion of stocks are making a large proportion of the winnings]
Inference: if you invest by choosing individual stocks, the most likely outcome is that you’re gonna be worse off than if you just bought treasury bills. (Because it’s very unlikely that you happened to pick the 4% profitable stocks.)
From an ethical perspective, it’s also probably best to invest in a company whose products / services are in line with your values, rather than investing only for the $$$ profit.
[quote]People want certainty … Example of a person suffering from back pain: one doctor says he’s seen many cases and it’s hard to say what’s wrong. He suggests trying a treatment and going from there. The other doctor says he knows exactly what is wrong and knows what to do. Which doctor will he coose? Most people would choose a doctor who seems certain about his diagnosis. But that doctor might very well be wrong.
As much as we crave certainty, it rarely exists, and it definitely does not exist in the world of financial markets …
… market experts may have motives other than accuracy. [/quote]
Choosing one’s set of beliefs is a lot like investing.
The naive have a tendency to rely on a few overconfident pseudo-experts who pretend to be sure of what they’re saying.
In reality, especially when concerning complex systems (e.g. the human body, financial markets, religion, etc.), the real experts are far more reserved when it comes to making categorical (black-and-white) pronouncements.
Usually there are many competing versions of the “truth”.
The foolish pretend that they know which one is correct, usually relying on the pseudo-experts to back them up.
Meanwhile, those who know better take the rational approach of withholding judgement while making their decisions under the awareness that any one of the versions may well be true.
Honestly it is quite amusing to see how the naive and intellectually arrogant people imagine that they are being smart by choosing a small subset of stocks (or beliefs) to invest in, and and up being worse off than if they simply gave equal weight to everything by e.g. investing in index funds (or keeping an open mind when it comes to beliefs).
The same religious conservatives/fundamentalists who imagine their own narrow set of religious beliefs to be The Truth™, are the same people who invest in individual stocks instead of simply buying index funds.
Just as they foolishly imagine themselves able to pick the right religious experts to spoon-feed them The Truth™, they also foolishly rely on a small number of stocks to make them $$$.