In the horse race, one of the horses has to win. (Unlike the stock market, where he whole thing can go down.)

That's not directly relevant. The lesson in your story has to do with the common knowledge that people who are successful investors do not churn their portfolios a lot. When you do a lot of trades, the people who make the money are the people who collect the fees. Money managers sometimes make commissions on trades so of course they want to make a lot of trades. Look at a guy like Warren Buffet -- okay, look at Warren Buffet, there aren't any other guys like him -- he buys stock in companies he believes in and holds onto the stock for a long time. But he studies up on each company before he buys into it. If you want to spread your risk then you buy into a fund. If you buy into one that doesn't churn much then the costs will be low and you'll do better on average.

The main lesson is to avoid transaction costs from buying and selling frequently.

From what I've read. I don't know personally, not being an investor. But that is what the story is about. Avoiding transaction costs (with few trades) and minimizing risk (with a fund).