People who understand investing well, is it true many of them don't invest in index funds like SP500 but they study each specific stocks and invest in tham to maximize ROI?

For example a colleage kid who don't have time to spend finding what stock to invest and why to invest that, so they just put in SP500

while a rich dude who have been trading for years they don't do that.. they invest specific stocks only, based on their analysis or strategy so they outperform SP500 at the end.