The whole point of index funds is that individual decisions - no matter how well reasoned they appear - don't seem to work out long term. The decision protocol that looks good today and may have worked once, twice of five times in the past will eventually lead to a ruinous decision later on that wipes out all the prior gains.

If the logic you describe works for one company why wouldn't it work for two, or five or ten out of SP500?

Heck if you can indeed pick any winner even by just a 2-3% gain than the passive index, why wouldn't you better off by building a fully custom curated SP500 that contains companies that are more likely to succeed? That 3% adds up to massively more money long term.

The whole point of active trading is exactly that, a thinking logical human being, adding all their intellect ought to be more successful than passively doing nothing.

Yet history says otherwise. Even when faced with decades long evidences active traders still believe they can do better than passives.