 Good day, fellow investors. This is perhaps the most important video I have ever made. I will share with you seven investing truths that I think are essential for any investor to know, especially in this moment in time. At the end, I will even show you my portfolio so that you know how am I positioned, because I see now 8000 plus subscribers, which is now a point where, okay, this isn't a joke anymore. I have to really build a framework. I have to send a message. I have to deliver on what I'm saying. And my goal is to help people achieve their financial goals in a sustainable long-term way. And when I say long term, I talk 20, 30, 40 years. Let's start with the seven truths. I will tell you later about my portfolio and about an idea that I have that I think will help everyone and help systematize the knowledge on this channel. Let's start with Benjamin Graham, the investor's chief problem. Even his worst enemy is likely to be himself. Bam! So look at yourself in a mirror and think whether you are your worst investing enemy. This leads me to number one. 90% of you will probably lose money from today, 20 February 2018. 90% of you that are watching this video retail do-it-yourself investors will lose money from this point in time. It's not me who I'm is saying that it's simply statistics. Let's look at this. 20 year annualized returns by asset class from 1997 to 2016. Reads almost 10%. SAP 500 7.7 stock bonds. I have already shown this chart, but it's extremely important. The average investor 2.3% inflation 2.1%. This means that the average investor, average investor just beat inflation. Okay, but this is the average investor. Let's split that up. Let's imagine there are 100 investors each investing in 1997 100 bucks. One investor gets 20% per year. Nine investors get 10% per year and the remaining 90 investors get 2% negative return per year. If I sum all that up, the one investor that got 20% per year got to $3,833 from the starting 100. The nine investors at 10% per year from the 100, they are now at 672. The 90 investors that started with 100 are now at 66. So when you sum everything up, the whole 100 investors started with 10,000. Now they are at 15,821. This is approximately 2.3% per year over 20 years. So the average yes made a minimal marginal return on investment. Most investors lost money. Why do most investors lose money? I have a question for you and looking forward to the comments. Did you or did you not invest most of your wealth in stocks in the last three years? If you invested most of your wealth relatively to what is your income in 2009, 2010, 2011 or did you invest most in the last two, three years? The answer will show you that most investors invest most of their wealth of their income at the worst point in time. In 2009, 2010, 2011, I would get my salary, I would immediately put it in stocks and then I would hustle my way around to get some money somewhere, work, do things, dive, whatever to survive the month. But next month my salary would come bam in stocks. And that was because stocks were extremely cheap. Most investors are bounding on stocks now with the SAP500 at extreme valuations and extreme heights. My problem is, okay, how can I now help people? Let's see this. I thought the SAP500 was overvalued in 2015. I thought it was overvalued in 2016, 2017 and I think it overvalued now. However, if somebody would have followed me 2015, 16, okay, they would have invested in emerging markets, but that's a different story. But the SAP500 is up 30%. So how can I say to people, okay, it's overvalued, be careful, and then it goes up another 30%. That's my problem. However, as I said, I will put this everything into framework, analyze various investment asset classes, put the risk reward, and then with an option, sometimes the best investment is simply cash, whatever happens around the world. So I'm going to do that. And that's, I think, how I can help you not making the most common investing mistake, investing too much money at the wrong time in the market. Investing truth number two, there can be 20, 15 year periods where stocks go down or nowhere. When you adjust for inflation, they really go down extremely fast. Take a look at this chart from 1881. There have been six very, very long periods in the last 140 years where stocks went nowhere. First 18 somethings till 918 years nowhere, then few years later, 19 years nowhere, then Great Depression 23 years nowhere, 1968, 1982, 14 years nowhere, 2000, 2013. And if stocks go back to just where they were 2013, then we will have 18 years again nowhere. At current valuations, my expectation that we might even see 18, 20, 25, 30 years of nowhere from these levels. So that's something you have to know and you have to adjust your thoughts, your investment strategies, your strategies that will bring you to your financial goal accordingly to whatever can happen and what is the likelihood of that happening. Can it happen? Yes. Okay, am I ready for that happening? That's the question you have to answer. You have to be ready. And if you're ready to whatever can happen, then you can invest happily in stocks because, you know, if I get it, if stocks go higher, perfect. If it doesn't happen, if for the next 20 years stocks go nowhere, okay, I'm still good. That's the key to successful investing. And that's also the message I want to send. Investing truth number three, nobody. And I really mean nobody knows what will happen in the next 10 years. If you go back 10 years, 2008, beginning of 2008, first very few assume there will be a crisis. But then if you ask somebody, we will have an environment of negative interest rates for eight years without inflation, with very low inflation in Europe, seven years in the US, the federal funds interest rate at 0.25, Japan negative interest rates, buying bonds, buying stocks, such a loose monetary policy scenario without inflation, somebody would have called you totally crazy. So I'm saying that nobody, absolutely nobody knows what will happen in the next 10 years. Nobody. It's impossible to know. There are too many variables to make even an educated guess. So again, the key is to be prepared for anything and take advantage of what can happen. Nobody knows, nobody knows what will happen. If you go back to 1998 and you ask people what will happen in the next 10 years, again, nobody would have gotten in right. I wish I can tell you, okay, invest in this stock, invest in this stock at this moment in time. I really don't know. So stocks can go down. We are at the late part of the economic cycle, late part of the debt cycle, late part of the market cycle, late part of every cycle that you can look at. So I wish I would know where to invest now, but I don't. When I will exactly know what and where to invest like it was commodities a year ago, emerging markets a year ago or something like that, China, just six months, there have been plenty of stocks we have discussed, then I will again share it with you. At this moment, I think it's best just to stash cash. Do nothing. If you're not sure about what you're doing, just put cash aside and you will find in better investments in the next 10 years and you will do well. You don't need to rush invest in everything every time because everybody does that. As you have seen in rule number one, everybody loses money usually. Don't beat the fool that loses money. Number four, there is no such thing as a defensive stock. Forget about it. There is always nice, it's nice to write an article, do a video, defensive stocks, people get high on that. There is no such thing. There is no such thing as a defensive stock, especially in this highly overvalued market and environment. This is a great info graphics from visual capitalist and you can see how in the credit crisis, everything, houses, reeds, European stocks, junk bonds went down. Commodities went down, trades, air aviation, everything went down. What didn't go down? AAA rated bonds. Okay, they went up a little bit, but less than what they were expected to give. Pair trading futures. Gold went up in this case, but you never know what can happen and global macro went up a little bit. So, forget about defensive stocks. Best defense when there will be a crisis or a stock market crash is cash. Number five, investing is not easy, but it can be done if you have a clear set of rules, clear set of criteria and then, okay, this is what I'm going to do with my life. I want to reach those goals. I will have conservative targets if I hit the jackpot somewhere good, if I don't, also good. And if you have cash and you patiently wait for the opportunities to show themselves and you keep in mind that you have a 40, 45, 50 year investment horizon ahead of you, you're not greedy, you don't want to get rich quick, then you can do really, really well when those opportunities show themselves. Let me show you an example. You will see later more in my portfolio, but this is something very important. This is the average home price in the Netherlands and this is just the average home prices around Amsterdam exploded and were very cheap around 2012 to 2015 and now they exploded. Average prices out of Amsterdam didn't go anywhere. In 2015, I bought the last house that was selling for cheap because nobody wanted a house then. Of course, since then house prices around here exploded. I bought it at the mortgage fixed interest rate for 20 years. So already now I'm very, very happy. And my intention is I'm not going to sell this property. If I'm not going to live in the Netherlands, I will rent it out and I will have what I call a good business because I really think this investment in the area I bought is a very good business and I bought it at an extremely, extremely fair price. So those things, you keep them forever. If I move, I will rent it out, but this is really where I invested in the last three, four years. We have refurbished the house, invested a lot of time and money in the house, also to buy it because I bought it in the most beautiful village I think in the Netherlands, so the most luxurious. If you are from the Netherlands, I think that if I say Bladikum, you understand where I bought a house. So I really took advantage of such an opportunity because I was ready to take it. I had stocks, I sold a lot of stocks and I had the money and the time to look for opportunities. And I took the opportunity when nobody in the Netherlands wanted to buy a house in that quarter. When I bought a house in the region, there were 1,700 real estate transactions. Last year in the same quarter, there were 17,000 real estate transactions. So that's 10 times more than it was the case. Why? Because if you look back at the chart, nobody wants to buy something when the price drops. If it is real estate and stocks, nobody wants to come even close to that. However, when the price starts going up, everybody rushes to buy because they are afraid of missing out. Crazy rationale. When you go shopping, when you see a discount, you're happy. When you see a discount with houses and stocks, nobody's happy. So take advantage of that irrationality. Don't be the irrational person. Number six, investing is a positive sum game, but get rich somewhere else. Investing is a positive sum game, which means that businesses, if you invest in businesses, in bonds yield value to shareholders through their earnings and dividends. So it is a positive sum game. If you invest, you will do well over the very long term because you will get those dividends every year. You can reinvest them compounded interest. So you will do extremely well. But you don't know if you will get rich or you will be just well off. So it's very important. So if you want to get rich, get rich somewhere else and use the stock market, use investments as a tool to protect your wealth, protect it from inflation and perhaps get a decent nice yield on it. But the key is protection and accumulation of wealth, not getting rich quick overnight. Those who promise you 30-40% per year, those will probably end up bankrupt very, very soon. You will see. Number seven, Peter Lynch always was saying, invest in what you know. So if you know something, let's say you are a real estate agent and you see an apartment close to university, you know there is huge demand for that apartment and the yield now is 5%. Put your money there because you know how to manage, you know how to get students into, you know how to rent, you know all their laws, you know everything. So stick to your circle of competence. If you're specialist in medicine, if you're specialist in, I don't know, semiconductors, whatever, stick to your circle of competence until you learn about something else and then you expand your circle of competence. You can do it by learning four, five, six, seven years, even better if it's a cycle or by investing a little bit as education money, where if you lose it, you don't care. So when you stick to what you know and you don't do anything, when you are not comfortable, you will do extremely well in life. You only need a few times to do a great investment and you will do amazingly over time. Buy a house, buy the correct stock at the correct time, you will do very great. Buffett's returns were because he invested most of his money in Geico in the 1950s, American Express in the 1960s, Coca-Cola in the 1980s. So just a few investments created what he is now. Not constant looking for crazy investments, constantly reaching out, so just good investments compounding returning cash dividends which he reinvested and that's it. Simple, few investments over the long term will get you where you want to get. However, if you do stupid things and I'm going to close the rules before we get into the portfolio with this, the key to investing according to Charlie Munger is to avoid doing stupid things. Remember and now I'm really looking forward to the comments about my portfolio because I want to see if you will be surprised or not. This is the first time I share this. I didn't even think about it. I didn't think, okay how much wealth do I have in real estate, how much in cash, how much in stocks. I love stocks, it's my passion analyzing them, looking at businesses, looking at what will happen. That's really what I love doing, it's my passion. But I have investments that I don't even think about. I didn't even think about what's the worth of the real estate properties I have, what's the cash, how much it is there. It was enough, okay. And stocks, okay I have the return that I measure but that was it. And especially now a lot of it is in cash. Let me show you. So my portfolio, boom real estate 80%. I wrote down the approximate values so 80% of my wealth is in real estate. 13% is in cash, stocks is just 7%. And most of that is in risky short-term alphabets. Gold hedge, some commodities, some growth in China that I'm going to close down as some things have unraveled already. So I hope you're not disappointed but I sold a lot of stocks as things worked really well in the last eight years. And that's also my message. Invest for the long-term. Invest through the cycle. Be greedy when others are fearful. Be fearful when others are greedy. Think long-term and you will do well. Don't get into the machine of what everybody else is saying because that usually leads to poor, poor returns. Second portfolio I want to show you is my son's portfolio. That's the, my portfolio is okay, wealth protection, inflation protection, wealth, slow wealth accumulation. My son's portfolio, he just started investing a year ago with small monthly amounts. Of course he's just 14. What does he know about investing? But he does that every month. Smart boy. We'll see where he ends up in 20, 30, 40, 50 years. Let me show you. So my son's portfolio is a little bit different. 33% in cash. So like Buffett we are waiting for opportunities. 10% a little bit stretched for some alpha place in gold miners. 30% in commodities, late part of the cycle. Something's already unraveled. Still have to sell something. And that's why the 30%. 27% various growth plus value emerging markets. Also some US stocks. That's one for my son if you have no wealth and one is if you are wealthy and that's how I have allocated and I have played this last economic cycle that is now in the late part over the last nine years. 2013 I was totally in stocks. 100% in stocks. And I said I was prior to that buying stocks like crazy. Before that 2007 I was let's say cash stocks 50-50. I lost 25% of my portfolio in 2008-09. But later I added so much money that I did really well. 2002 100% in stocks because everything was so cheap back then. So I will conclude I was really thinking how can I help even more? How can I do well? How can I help people achieve their returns? And I need I understood that YouTube can be very misleading because a video here, a video there doesn't cover anything. So I have decided to create a website where there will be a clear framework of what I do and there will be perhaps something else for those who are interested in more. But the framework of what I do, of what I think, of where we are, of what are the risks long-term wealth building will be there so that you can always go somewhere and see okay where does that fit? If I talk about a stock where does that fit Sven's view? And something else so if I talk about the stock from now on it will be a bouquet case and a beer case, bear case or right. So we will see how I can see stocks in two different ways and then it will be up to you maybe also with my help to attach probabilities to what can happen risk reward. So that will be very interesting from now on and I think I will give you the right mindset to invest better in this environment. I'm looking forward to your comments. How do you see that? Are you surprised by the portfolio, by the rules? Did I miss out on any rules any truths that are extremely important to share that you want to share? Did you start investing just in the last three years or you invested heavily in 2009-2012? A lot to comment, a lot to learn from you. Looking forward really to your reactions this time as this is the key video I have made up till now. Thank you for watching. I'll see you in the next one.