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” is a captivating documentary that delves into the financial revolution that transformed investing. The film challenges the long-held belief that “you can’t beat the market,” a notion rooted in the Efficient Market Hypothesis (EMH). This hypothesis, championed by Nobel Laureate economist Eugene Fama, posits that financial market prices already reflect all available information, making it impossible for investors to consistently outperform the market.
Morris’s documentary features interviews with influential figures, many of whom are in their seventies and eighties, who have achieved great success in their fields by trusting the wisdom of the market. These individuals have all been associated with Dimensional Fund Advisors, an investment firm founded in the early 1980s that has been a significant force in shaping the investment industry.
In the first half of the twentieth century, investing was often seen as a mystical or intuitive endeavor. However, this changed dramatically with the “data revolution” of the second half of the century, driven by the advent of computers. Many of Morris’s interviewees encountered these early machines during their university education, likely at the University of Chicago, where they learned to work with punch cards and tape reels. As electronic computing became more prevalent, it became possible to systematically analyze vast amounts of data, transforming investing from a mystical practice into a data-driven science.
The film explores the impact of this shift on the investment industry and the lives of those who embraced it. By interviewing key figures, Morris provides insights into the mindset and strategies of investors who have thrived by adopting a data-centric approach. These individuals often emphasize the importance of long-term perspective and disciplined investing, rather than attempting to time the market or pick individual stocks.
One of the central themes of “Tune Out the Noise” is the idea that the financial revolution has not only transformed investing but has also reshaped the way we understand markets and economies. The documentary highlights the power of data and the potential for individuals and institutions to harness it for their own benefit.
As the film progresses, it also touches on the challenges and controversies surrounding the EMH. Critics argue that the hypothesis oversimplifies the complexities of markets and fails to account for factors such as investor behavior, market manipulation, and systemic risks. Despite these critiques, the film suggests that the EMH has had a profound and lasting impact on the investment landscape, shaping the strategies and mindsets of countless investors.
In conclusion, “Tune Out the Noise” is a compelling exploration of the financial revolution that has redefined investing. By blending personal stories with economic theory, the documentary offers a nuanced look at the power of data and the enduring influence of the Efficient Market Hypothesis. It invites viewers to question their own assumptions about markets and investing, encouraging them to consider the potential benefits and limitations of a data-driven approach to finance.
