 Good day, fellow investors! We have recently passed an amazing number which is 71,000 subscribers on YouTube. And to introduce myself to all the new subscribers and future subscribers, I thought that I would share my five core investing beliefs, which is probably the reason why you are subscribed to this channel and why you like this content. And therefore, one video where I summarize what is the fundamental thought of this channel, I think will be enjoyed by you all. So, the fundamentals of what I do are, knowing that the markets aren't efficient, so that's one, then having a long-term view, having a long-term investing view, which means from beyond two, three years, because all the market is focused on next-earnings quarters, where will the price of oil go next six months, what will happen to demand next year, and I'm thinking more, okay, what will happen to oil in the next five, 10, 20 years, and how will that impact my investing. That's what I do, and that has given great rewards to me over the past, and I'll also discuss a little bit about myself and my historical investing journey, and how I came to those five beliefs. Further, there is still research, research, research, the more research I do, the more I know, the more I understand what's going on. And then one more technical little thing that comprehends everything, and that is hyperbolic discounting, which you'll see how it works and how it gives you an advantage as an independent investor. So, let's start with the efficient market hypothesis. It was created in the 60s, 70s by Eugene Fama, Kenneth French, and promoted mostly by them, and it states that the stock price reflects all available information at that moment, and that there is no point in doing anything, you just have to accept the stock price, and the reward will be given by the market. You cannot beat the market, you cannot know what will happen in the future, and anything you do, any thinking is worthless. That's the efficient market hypothesis, works perfectly with people that are lazy, that's the majority of people, so okay, I don't have to thank you, you're giving me something that I don't have to think about, give me a pill to cure all my illnesses so that I don't have to think about being healthy, I don't have to exercise, and that's typical, and that's why it works so great. It's easy, it's simple, and everybody loves it. However, as would Buffett say, in his 1988 letter to shareholders, in any sort of a contest, financial, mental, or physical, it's an enormous advantage to have opponents who have been taught that it's useless to even try. And then the funny thing is that this also reflects in French and Fama's data. They have analyzed, they have said, okay, the markets are efficient, then they have analyzed, what's the difference if I buy value, and if I buy growth stocks based on price-to-book values, what's the difference in long-term returns, and the answer is that if you buy value, you have better returns, which means the markets are not efficient as they think they are. They have improved their formula later with the five factors, but still, if you are an independent investor with a long-term objective, you can do better. If we just take a look at their data, if we, in 1926, invested in growth stocks, growth stocks are categorized in their data as stocks with the highest price-to-book value, the 33% of the market with the highest price-to-book value, $1 would turn into something like $100 in the last, what, 95 years. However, if you invested in value stocks price-to-book in the lowest 33% of the market, $1 would turn to more than what, $100, probably something like $100,000 on this chart. I don't know the exact data, and now it's probably a little bit less because growth did well. But this tells me that over the long-term, I can do well, and I can do better at the market if I follow certain guidelines, which we'll discuss in a moment, and if I work hard on doing research. So, as Wood Buffett said, it pays a lot to just work hard, and it pays even better if everybody else thinks that there is no point in working. Now, let me explain this. My simple common sense application, as we said, grandma style or fat Tony style, is are you buying the stock or the business? Everybody looks at these stock prices, stock prices going up and down. Of course, that's efficient in the short-term news, stock price goes up, you can do nothing about it. But if you simply change, switch your mindset and say, okay, I'm going to buy a business, just think of a restaurant down the street of a hotel, well, maybe not now, but long-term or something like that. Something that creates cash monthly, yearly basis, that there is no quote on it. Okay, I'm the owner of the business or you are owner or I don't know what. And then you see, okay, what's the value of that business? What's the business return? Then you don't really care about what happens in the market, except for when you want to take advantage of the market situation. For example, this is the SAP 500 earnings. You see, the trend is clear, the red line. However, the earnings, depending on the economic situation, went up and down constantly. So that is normal. Businesses are volatile, nothing is linear, but the long-term trend is pretty clear. And this crisis shall pass too. Just to emphasize this, these are the corporate profits after tax in the United States. Look at the volatility, look at the drops that are normal, but also there is a clear exponential compounding trend. And that's what you are investing in. When you are happy with the business return, then you are an investor. And then as an investor, you look at the long-term, at the long-long-term earnings, and that's a pretty stable line. But the market will give you opportunities to buy low, and if it's really exuberant to sell high. Let's just take another look at the SAP 500 over the last 40 years. We have a clear trend of growth, but as everybody is focused on the short term, let's try to beat the market in the short term, which I agree you can't. The markets are relatively efficient in the short term, but extremely inefficient in the long term. This was also the topic of my PhD. The longer the period I used to make an analysis, the more inefficient the market was, or the more efficient for me as a common sense investor. Just look at the trend, the growth, and then you see how irrational investors are. In 2007, 1999, they were happy to pay 1500 points for American businesses in the SAP 500. Just two years later, they were unhappy to pay 700 or 600 points. That's 50% lower. Why? Just because the outlook, there was a recession, which is normal things in nature. And then also, depending on interest rates, what else is there? They are happy to pay 3000 points a few months ago, now a little bit less, then a bit higher. And it's really so volatile. But as an investor, you look at the businesses, you own what you own. You know that, I don't know, if you own a house and you're renting it out, you know that 90% of the time it will be used. But 10% it will be vacant. Every real estate investor knows that the 10% of the time you won't get the money for the renting out. So that's something you have to implement into your calculation. There goes the value of the house. And that's how investing is done. And if you have such a mindset, then you can beat the efficient market. We don't know what will happen in the next six months. When will this situation is? When will it come to normal? Somebody says it will take three years. Somebody says it will take 12 months. And everybody is panicking. And you see all these situations just comment on the oil price, which is interesting today, oversupply, no demand. And then simply the price goes even negative to $35. That's common just in an energy market in Germany. If it's sunny and if the wind is strong, then energy prices are usually negative because it doesn't pay to stop those windmills and solar panels to shut them down. And it simply pays to sell the oil for a lower price. The oil market, there are plenty of traders, gamblers, whatever, crazy. And if those get margin calls or something like that, they are forced to sell. And then you have these drops. But when the situation stabilizes, it's likely that there will over the longer term be, again, a good balance with oil prices, a fair balance for producers and purchases. You just need to see the long term and have faith in the world. And that requires patient research. And if you think long term, you have the advantage to see what others don't be greedy like in 2009, when others are fearful and fearful when others are greedy. Now the first pillar of my content is value. I call myself a value investor. And then you think, okay, but growth, and what about growth? Well, value, growth is an essential part of value. When I value a business, I look at the cash flows from today till judgment day, as would Buffett say. If those cash flows will be growing, then I have to implement the growth into my calculations. And that increases my fair value. So when somebody says value or growth, I say both. And that's also in life. If you have a both mentality, you have so many more options. So of course, not growth, this money, this company is losing money, but it's growing 50%. It will probably never break even, but it's growing. Let's buy that. No, as I said, both value and both growth in a good business model. And if I look good, you'll see that you can find growth and value at the same time. And those are usually the best investments. How to find both value and growth? Well, it all boils down to research. Buffett was once asked, how does he find those great investments? And his answer was, well, I usually start with the ace. So that's what I do. This week, I'll be researching the steel market, steel stocks, to see how those fit long-term opportunities, long-term investment opportunities. And that's next week, next week, something else. I have Norway also on my list, good businesses, etc., etc. And the more I research, the more I know as investments, so does investment knowledge, compound for the long-term. And I'm happy to share this on this channel, where we do stock analysis, one stock market news with a long-term twist per week. And we discuss investment mindset as we are doing now. So if you haven't, please subscribe to this channel and click that like button for the YouTube algorithm to support the channel. Thank you. And the final, a little bit more technical explanation that takes into account everything that I do. As said, the market is focused on the short-term. So they value everything in the short-term more than that they value something in the long-term. And here you have two lines. One, the red one is the hyperbolic discounter. And you see how he doesn't make a difference much more into the value that comes into the future. However, that is what compounding is. That is what investing is. And the exponential discounter doesn't really apply much value to something in the short-term, a big difference. But you know that in the long-term, the value starts to compound. And what happens? Three, five, 10 years really matters. The market doesn't care what will happen in the next two, three, five years. If some company is making a great investment now that will pay in two, three, five years down the road, the market doesn't care. If some company, I don't know, has issues now with the oil prices down, and they will model the, all the environment, all the stocks as the recession and oil prices will stay down or negative forever. And that's something so surprising when things are bad, analysts are pushing down their estimations of prices of valuations. When things are going good, they are pushing them up instead of doing the opposite and trying to find the long-term balance. And that's also connected with hyperbolic discounting. We as humans are wired to focus more on the short-term and give more value to the short-term instead of the long-term. And I think when it comes to investing, the discrepancy is somewhere between two and three years. I look at businesses, I look, when I find a great business that will be great from year three to year 10 from now, then I know I might find some real undervalued gems, and you'll see how that works just in a moment. So this is when I started investing in 2002. I come from Croatia, lived the first 40 years in Croatia, and I started investing when the stock market was at 1,000 points. It was already three X up from the bottom in 1999. But I was looking at businesses, found a business that I liked. So I think the first business was the price earnings ratio of 7, dividend yield of 5% and 10% growth. That is what was I buying in 2002. 2002 till 2004-2005, nothing happened. And I was just buying more and more and more because I wanted to be an investor. I wanted to have a million in stocks, have 5% dividend, and retire at 25, 30, 35, whenever I hit that threshold. Fortunately, for me, the market suddenly changed and by 2006, when was 23 and extremely rich. The dividend didn't grow that much, but my stocks went up five to 10 times. That was a crazy environment. I sold, bought the boat, started the PhD, invested a little bit in myself, in my education, and invested also a little bit in the United States, was down like everybody else, 30%. 2008, when I sold some, brought back to my own market and I was buying big from 2009 to 2014. Because I again saw nice businesses. This was my best stock, 70% of my portfolio, 2009 from 2012. I remember buying it exactly that deep 2009 a little bit. And then when I had the money up till 2013, a little bit higher, I went in buying because it was a great business, 10% growth per year. Price earnings ratio was really, really low, 7% or something. The dividend yield was 8%. And I thought, okay, that's something I like. That's something I can own forever. So I'll just keep buying, putting paycheck by paycheck by paycheck. And then the market again rewarded me by pushing the stock up three times. When we decided to move to London, we decided to do other things. And then, of course, I sold, we bought a house, invested more in education, et cetera, et cetera, invested in other businesses, other stocks. And the moral of the story is always, when you find the business that you like and you want to own it forever, you buy it. And especially if it's a great long term business. And that's why everybody's saying long term, long term, long term, because most people don't see the long term. That's why they are focused on the short term. They have to pay, who knows what their mortgage, they are selling, putting the prices down in panic. And that's the best time when you can buy. And that's what I did. And I keep doing that. And I think that sooner or later, I'll be rewarded. Be it by owning great businesses that I never have to sell or by a change in valuation that if it happens good, if it doesn't happen, also good. And in 2017, I started this YouTube channel. So really having a lot of fun, happy sharing, doing a bit different. I started writing articles in 2015 when I was an accounting professor in Amsterdam. The summers were free. So I said, okay, this summer I'll write, try to write a book, some articles, share my research. And from then I started to write more, more, research more, do more, resign as a teacher and do this as a full time stock market researcher. Thank you for watching. If you have any question, you can always send me an email or contact me or check my page. There is more about me, my book free investment course for everybody where all this educational content, I tried to put a video and also write it in a paper so that you can always come back and learn more about investing. There is also my stock market research platform for those who are interested in my portfolios. And I'll talk more about those tomorrow. Thank you. And I'll see you in the next video.