Watch Errol Morris’s Tune Out the Noise Free Online: A Documentary About the Financial Revolution That Transformed Investing
You can’t beat the market. That, at least, is the advice we all encounter early on when first we try our hand at investing. Homespun though it may sound, the idea has academic roots: the Efficient Market Hypothesis, as the economists call it, holds that the prices in any financial market already reflect all available […]
Errol Morris’s “Tune Out the Noise” offers a captivating exploration of the financial revolution that transformed investing, challenging the long-held belief that no one can beat the market. The documentary delves into the Efficient Market Hypothesis (EMH), a theory that posits financial markets reflect all available information, making it impossible for investors to consistently outperform the market.
The film begins by highlighting the EMH’s academic roots, tracing its origins to economists who argue that stock prices inherently encapsulate all known and knowable information about a company’s future prospects. This theory, refined by Nobel Laureate Eugene Fama, who appears in the documentary, suggests that no investor, regardless of experience or intuition, can consistently beat the market.
Morris interviews several influential figures, many of whom are seasoned investors with a history of success. These individuals, often in their seventies and eighties, attribute their achievements to trusting the market’s wisdom. Many of them have been associated with Dimensional Fund Advisors, a firm founded in the early 1980s that has played a pivotal role in shaping the investment industry.
The documentary contrasts the mystical aura of investing in the first half of the twentieth century with the data-driven approach that emerged during the “data revolution” of the latter half. This transformation was driven by the advent of computers, which revolutionized the way investors collected and analyzed information.
Morris’s interviewees often encountered computers during their university education, particularly at the University of Chicago, where they learned to work with early computing devices using punch cards and tape reels. As electronic computing became more prevalent, investing shifted from a mystical practice to a data-intensive science, requiring meticulous data collection and programming.
Despite the challenges, this shift enabled investors to leverage computational power to analyze vast amounts of data, leading to more informed decisions and, in many cases, significant financial success. The film showcases how the integration of technology into the investment process has not only transformed the industry but also challenged traditional notions of market efficiency and investor behavior.
“Tune Out the Noise” invites viewers to reconsider their understanding of the market and the role of technology in shaping the investment landscape. By presenting the stories of these seasoned investors and the transformative impact of the data revolution, the documentary offers a compelling insight into the evolution of investing and the enduring power of the Efficient Market Hypothesis.
In conclusion, Errol Morris’s “Tune Out the Noise” is a thought-provoking documentary that examines the financial revolution that has redefined investing. Through captivating interviews and a deep dive into the Efficient Market Hypothesis, the film challenges long-held beliefs and highlights the transformative role of technology in the investment world. The documentary serves as a reminder of the ongoing evolution of financial markets and the ever-changing landscape of investing.
