Why do we pay attention to market performance history when making decisions if we are also advised to not choose recent success stories?

31M and fully self taught. I've been reading up on investment for a couple years now ever since a significant salary bump that's made this feel possible. I've mostly just browsed reddit for opinions, which I admit is by no means the best economics education. I have a curiosity to learn but full disclosure I also go gloss eyed whenever reading/listening to anything that gets too far into the weeds. It was certainly not something I ever wanted to pay attention to while I was in school.

SO with that context out of the way, I've been thinking recently... why is it important to look at the performance history of a stock/etf/etc within the last 5 years if I'm also being told "If it's hot, you're already too late." The sentiments make me go crosseyed and I realize I don't know what I should be looking for. It's performed horribly? Why would I invest? It's done incredibly? I'm too late so don't bother.

I'm currently invested entirely in XEQT because it fits my risk appetite and I appreciate the simple all in one solution it provides... As you can probably tell, I barely know what I'm doing. Out of sheer curiosity... I'd love to get better at actually knowing what I'm looking at/for when examining the last 5 years of performance history.

So what should I be looking for? What am I looking at? Do you have any ELI5 books/videos/podcasts you'd recommend?

Thanks