Neither. Obviously, the average excellence of "doctors, masters and bachelors" of the most renowned universities is higher than the average excellence of people who are self-taught. Nobody suggests that being self-taught correlates positively with excellence.

The quotation is still undoubtedly true, because there are many more individuals who are self-taught than individuals who have these credentials. It is also plausible that the variance in excellence among the self-taught is much higher. Therefore, it is trivial to identify self-taught individuals who are more knowledgeable than most highly credentialed university graduates.

In fact, as a doctoral student in applied causal inference at a fairly renowned university, I can identify several self-taught Less Wrong community members who understand causality theory better than I do.