 Good day, Phil Investors. Benjamin Graham says that the investor's chief problem, perhaps even his worst enemy, is the investor himself. Therefore, to really invest well over the long term, to get to high investment returns with low risk, we first and foremost have to develop our investing mindset. We have to learn how not to make mistakes when going to get stuff, what to do, what is the right thing to do. And therefore, I will start this investing series videos focused really on developing the right investing mindset. In this video, we will discuss stock price action and your good or bad reaction. How, why we do what we do, why average investors do what they do, why is that usually very costly. I'm going to give you a few examples on what you should focus when it comes to investing, not stock prices, and then three simple steps to take away from this video that you can always apply to whatever investment that will allow you to weather all the stock market storms that are definitely ahead of you. You don't know when those will come, but those will come and you have to know what to do. If you look at 99% of stock market related content on the talking heads on CNBC, Bloomberg, whatever, YouTube, 99% of the content is related to stock price action. We are at the end of the year as I'm filming this December. So now we'll have a lot of articles and videos about what was the yearly performance of the stock market or ETF or something. Who was the best this year, the worst this year? And you will see a flooding of such articles and then forecasts into the next year. What will be the best market? Should you buy bonds for 2020? Should you buy this? Should you buy that? All price related. What was the best performer? People will usually flock to the best performance. What was the worst performer? And people will get rid of that because everything focuses on the stock price. And that's the wrong way to invest. The right way to invest is to focus on businesses because stock prices have been investing for 20 years. Stock prices are and will always be unpredictable. What you can focus on, what you can rely on when it comes to investing are business fundamentals. Now why do we focus on stock price action and not businesses? Why do we not simply invest for the long term? That's because our brain has been wired through 2 million years of evolution. And in those 2 million years, only in the last few thousand years, we are more of a thinking animal living in a comfortable home with security. Before that, we had to watch for bears, tigers, living in the woods, storms, fires. And we had to constantly listen to the noise in our environment and immediately react. If you hear a bear or a wolf or something, you would run, run in panic, run to the second wiring that we have and that's herd behavior. Because it was very important that you stick to the herd then and survive together. Similarly, if you see a stock price go down, it means that the herd is selling, which gives you the message, okay, the herd to which I belong is selling I have to sell to. And that worked over 2 million years to survive. But that's so far away from the comfortable chair you are making decisions now. So we are sitting in your chair looking at your screen and you are making decisions about investing. And that's a completely different brain you need to have. You need to understand the wiring that most market participants have and then rewire your brain for investment success. And I'll give you now a few examples about long-term investing and listening to noise so that you can slowly start to wire your investment brain to what really works today when we are in our cozy apartments, cozy offices, cozy seats and not fighting bear, stigers or wolfs. So those concepts are extremely important to be understood. Psychological concepts, but extremely important because after all, you are your worst enemy when it comes to investing. Warren Buffett in his 2008 conference for shareholders went so far that he said that you should forget about the stock price. So that's something really, really hard to understand. You invest in stocks and you should forget about the stock price. But let me give you a few examples that will really give you a clear investing perspective on what he meant. Let's start. So he said that you should forget about the stock price in his 2008 shareholder meeting in May of 2008. Now let's say that you googled the Berkshire meeting in 2008. You found the video. You listened to the video. You heard, okay, all you have to do is to invest in good businesses and then forget about the stock price. Let's say that you had a hundred thousand. You thought Google was a good business in 2008. You enjoyed the YouTube video with Buffett and then you said, okay, I'm going to take my $100,000 that I have and put it at Google stock in May 2008 as Buffett said and forget about the stock price. I bought Google at $286. Just seven months later, you would look at your brokerage account and you would see it below $50,000. So $50,000, half of your initial investment just went into smoke and this is what's really painful when it comes to investing. This is what nobody or very few can tolerate and this is where people actually lose money. Newspapers were full of articles about how everybody is selling. This is an excerpt from the Wall Street Journal struggling with whether to hold sell or somewhat improbably buy. Nobody was buying in October 2008. Then others purging vulnerable stocks from the portfolio already moving to sell several of their stocks because there was pure panic and if we look at the JP Morgan Guide to Markets, this is the eternal chart that's so important. The average investor realized a yearly return over 20 years of just around 2% while the SAP and all other classes, SAP 500 and all other classes did much better. Why is that? Because investors usually panic, sell at the wrong time, instead of buying more when there is negative stock price action. And if you buy more when things go bad, if you buy good businesses, you beat the market. Needless to say, what happened to Google, the initial $100,000 investment would now be close to half a million. So just what 10, 11 years later, half a million dollars would be what Google delivered. But so many focused on the stock price, so many focused on the 50% short-term decline in 2009 and it was really a mess then. But this is investing. Investing is buying businesses, no matter the stock price action in the short-term versus speculating, versus panicking about crashes. And I see so many panic words when it comes to crashes out there. That is incredible. Further, just to note here, there is so much focus on short-term price movements that even when Warren Buffett does an interview on CNBC, they constantly show the yearly performance and the daily performance. That's absolutely crazy. They're interviewing Buffett and showing stock price movements over a day or over a year. That's totally counter what Buffett is speaking there. But we focus, we as people focus on that short-term performance. To give you another example, an example I already discussed when I did a video on small-cap stocks and that is Walmart. Walmart stock fell from 6.3 cents to 1.6 cents in less than two years from 1972 to 1974. That was down 75%. Imagine someone telling you that Walmart should be the best investment in your lifetime and that you should put $10,000 in it in 1972. Two years later you would be left with just $2,500. Would you still love that person or would you be angry? Many would be angry, sell in panic and then miss on the huge upside that was next. Because the $10,000 invested in 1972 would turn into 19.2 million now, not including dividends. Further, if you focus on business, if you look at Walmart's annual report from 1974, despite that the stock price action was there telling you it was a bad investment, down 75%. Walmart's sales over the five years were constantly growing, went from 30 million to 167 million, income went from 2 million to 11 million, income per share went from 23 cents to 93 cents, number of stores doubled so everything was doing great. It was going on great with Walmart. The business was doing well but people kept selling and the stock price fell 75%. Those that held on to that, those that bought more, those are those that are rich now. So what to focus on? How not to get attracted by those stock price movements that everybody is selling, everybody is talking about? Well, it's pretty simple. You have to invest in businesses, focus on the business before you are buying. You really have to know well the business you are getting into own the business and expect your return not to come from the stock price, expect your return to come from the business. Be it in dividends, be it in investments. So the business is reinvesting growing. There are businesses that have both good dividends, both growth and both a moat and value and you can find them for fair prices out there now. Just look for those things. Secondly, how much are you going to put into something that depends on where you are in your life situation? How much are you going to put into stocks depending on what your goals are? And that's even better answered when you compare the stock price before you buy the fixed stock price, not the movements. You say, OK, the stock price is now 100. The business is giving it earnings of 10 price earnings ratio, let's say of 10 dividend of 5%. It will double the business in the next 10, 20 years. So that's good. That's growth. So I can expect a good business owner business has a competitive advantage. And then you say, OK, do I have other better options? No, then you invest. And if it goes down, you simply reinvest the dividend and then you own more and more and more of a good business. And that makes all the difference when it comes to investing. Thanks for watching. If you wish to check the businesses I am invested in for the very long term, that will I think weather cycles that will deliver great returns from the business side to investors that are ready to hold them for the really long term. Please check my stock market research platform in the links below. Thank you and I'll see you in the next video.