 Good day, fellow investors. Welcome to the stock market news where we differentiate between the noise that doesn't matter when it comes to long-term investing and the real hard facts that really matter when it comes to investing, be it behavioral finance, be it long-term trends, tailwinds, headwinds, etc. So, if you like such a perspective, what really matters to my investing, not the news that talk about something else on a daily basis, in the morning this, in the evening that, then please hit that like button, subscribe, comment, share, do something because that helps the YouTube algorithm promote more the video. We are close to 50,000 subscribers, so I would really appreciate if you can support the channel by doing something simple like liking, subscribing or whatever you like. Everything that we make on this channel goes to charity, so you are doing also a good deed by watching, subscribing and also watching the ads. Let's go into the content. There has been a lot of news, trade wars, of course, escalation, then stocks down, then the Fed lowering rates immediately and I want to put that into a long-term perspective and give you something that you can really take home and hang on in this investing environment. Let's start. The topics for today are pretty simple. The current stock market news, recession ahead, stock market crash, Trump, whatever, and then we're going to put that into a reality check what does really matter, what is really important, then we're going to give you a historical indication that now is the time to look at businesses, not stocks. Everybody is talking about stocks, now is the time to look at businesses and then of course we're going to close with an investing reality check. What does it mean to invest today? So let's start with the stock market noise. What of all the media content will not matter in a year, two years, five, 10, 20 years and what will matter? Let's see about that. This was the talk of the week, trade uncertainty, spiking, stocks went down on Tuesday, Wednesday, so there is uncertainty. Uncertainty is never good for stock markets. People get scary, prefer some other opportunities like treasuries and then you'll see somebody selling. But that is just hurting stocks. So trade wars have started to hurt stocks and trade wars have started to hurt US manufacturing that looks increasingly weak. You can see the sharp decline since the trade war, mumbo jumbo started like it was the case in 2007, 2008. So also the services index, the manufacturing index are slowing down but those have stabilized in China. Those have fallen but stabilized in China. So the trade wars are hurting more the US than China for now. So how did the manufacturing index perform ahead of previous recessions? Well, you see a clear pattern here. It doesn't mean anything but it could lead to a recession. And what happens if we are close to a recession? Well, everybody expects the Fed to cut down rates to stimulate the economy as much as possible so that God forbid stocks don't go down. But let me give you a reality check. This is estimates of potential economic growth of the Congressional Budget Office. The United States, Europe, Japan are all developed countries. You cannot expect the same levels of growth that have been in the past to continue in the future. It's simply depending on education, on the productivity of a country. And you can change the productivity by amplifying that fiscal stimulus lowering interest rates but that only goes up to a point and many are scared that we are at the end of the cycle. So a recession ahead we will see. Probably yes, probably no. But then again if the Fed lowers interest rates, stocks immediately rebound because they think everything will be good and that is what happened on Thursday. So really crazy volatility up 1%, down 3%, 4%. So really, really crazy. And now this is the noise. Nobody knows what will happen over the next year too. But I'm going to give you some real hard facts that will make you think about investing in this current environment. The S&P 500 is really high when compared to past numbers 1999, 2007 and we have now 2019 close to 3000 points. And then let's look at the S&P 500 from 20 years ago because if you invest, you are investing in the future, not in the past. So let's look how the top 10 stocks from 20 years ago performed. Microsoft, the market capitalization 20 years ago was 604 billion. Now it's 1 trillion. So that did good. General Electric is down from 500 billion to 78 billion. Cisco down from 366 billion to 200 billion. Walmart is around 300 billion. Exxon is around 280 billion. So I'll make a video on ExxonMobile, the long-term structural or cyclical issues on Sunday. So again, subscribe and click that notification bell so that you get a notification when the video comes out on Sunday. Intel is down 70 billion. Lucent Technologies merged with Alcatel. Nokia bought it for 14-15 billion. They own 40% of the company. So down from 234 billion to 6 billion. IBM down 70 billion. Citigroup not down much, but it was bailed out in 2009. So I don't know how to calculate that without or with the bailout. America online sold for a few billions. So down from 169 billion to 4.4 billion. So my message here is very, very simple. Don't look at stocks. Everybody talks about stocks. And we'll discuss more. Even Trump is talking about 401Ks, how the Democrats are hurting the stock market, etc. But that's not important. That is noise. And we'll give, put that into perspective. So focus on businesses. We have to focus on businesses that will be bigger in 20 years that have a competitive advantage that are fairly priced now. And if you build a portfolio with such components based on those factors over the long term, you'll do very, very well. Don't bet on something that might happen in the future. Really look for margin of safety, value investing. And I really firmly believe that from now, value investing will do really, really good on a risk-adjusted basis over the long term. Plus there is some good news. This is the email that I got from TD Ameritrade. I have still an account. I don't have any money in it because I used it when I was a kid. But still, this is the email I got. So we've turned commission free into commission free. And zero commissions on equity trades, ETF trades, option trades. So this is something nice, of course. If you reinvest those dividends, it's always better not to pay a $5 commission. But it also shows a competitive advantage. TD Ameritrade stock severely down. What is that? 40% over the last few months. Charles Schwab also. So they don't have a competitive advantage because everybody expects this, especially since Robin Hood came, expects things for free. If we look at TD Ameritrade's annual report, 46% of their revenue comes from commission intersection fees. So they're ready to sacrifice that. But how long will it take that somebody comes with more deeper pockets so that he can sacrifice the bank deposit account fees, lower net interest revenue on margins, etc. Maybe less trading in the market. So again, less margin or margin calls. So who knows. So it's really a difficult business to be in. You should focus on businesses that have an advantage, that have a mode. That's what Buffett always keeps saying so that you avoid the nine businesses here or at least that you buy them at the right moment in time. Now let's do a reality check when it comes to investing. Trump issued a tweet how somebody is attacking him. The stock market is doing terribly because of that and he focused on your 401Ks. And here it's something very important that we have to discuss. There is behavioral finance, there is short-term and then is the long-term input, system one and system two of how we think. The short-term way we think and the long-term way we think. And Trump is hitting here on the short-term way because if you see the stock market go down 3-4%, you think you are losing much, but actually you are gaining in the long-term and that's something we have to put into perspective. If I take a book Thinking Fast and Thinking Slow from Daniel Kahneman, he discusses how we think in two systems. One is the system one where we quickly do the first thing that falls into our mind and the second system is where we analyze things clearly, put things into perspective and then make a decision. Trump is clearly betting on those who use only system one, see stocks go down, oh my god, oh my god, we have to do something, stocks have to go up because it will be better for us. If you engage system two and that's what we're going to do now, I'm going to show you how the reality check is if stocks crash now, it will be better for 75% of the American population. Let's see. So this is it, delayed gratification, nobody cares about gratification, even if bigger in the long-term, what do you want, what does the majority of people want, they want it now and we want it now, we want it all. However, who benefits from higher stock prices, those that have large portfolios? And if you look at the wealth inequality in the United States, people of 45 and under have a median net worth by age of 11,000. So what you need is to build your wealth into the future and those over 65 have a median wealth above 200, 240, around 240,000. If you look at the growth in real mean family wealth has outpaced the median. This means that the richer are getting richer and the poorer, unfortunately here we see are getting poorer because their real word didn't go anywhere. If we look at the distribution of family wealth in the United States, and this is probably all over the place, only 25% of the people have the wealth, 75% don't have. So when stocks go up, those that have them get richer, those that don't have them actually get poorer in the long-term. Why? Because of this. When you invest, what you have to focus is the yield of your investments. If we look at the average Americans, 401k investments, for the younger ages it's really, really small. It's actually also small from a median perspective, also for the older ages. So the goal each American should have is to see stocks cheap so that you can buy more of them so that your wealth can grow faster. The key is on the growth of the wealth over the long-term, not on stocks going up now because most Americans will be buying stocks over the next 40 years. So when you want to buy something, you want to see the price go down, not up. And this is the reality check that I think 98% of the population is missing because of tweets like this. And this is very, very important. Let me show you this even more in depth. If we look at the dividend yield of the SAP 500, it is currently what 2% in the past. When those that are now 65 years old, they were accumulating their wealth with dividend yields above 4%. That's a huge difference in the long-term. And if we look at the median balances of 401k, 4,000 for ages 20 to 29, ages 30 to 39, 16,000, ages 40 to 49, so still 15, 17 years to retire, 36,000. So all these people, all these age groups, they still need to invest a lot, accumulate their wealth so that they can retire comfortably. Only ages 50 to 59 with 60,000, only they can benefit from stocks going up. And if we look at the population pyramid, those that are older than 55 that will actually benefit from stocks going up now, it is just 13, 28% of the population. So 75% of the population due to age should benefit from stocks going down from higher yields and from getting the opportunity to actually create wealth. So the conclusion here is very simple. Stocks should go down because that increases the wealth over the long-term. The return on investment is higher and that is what creates your wealth, not stocks going up and then next month you buy them because they are more expensive, more expensive and more expensive. So that's something we have to put into perspective. I think the viewership on this channel is 90% below 50 years. So 90% of you should benefit from stocks going down for the next 40 years and then they can go up. But that's a different story. Secondly, focus on the long-term, focus on investments, focus on the business, focus on that yield. Don't take the S&P 500 to yield and see just push your money there. Think, where can I get that five? I can pay my student that at six. That's much better than the 2% yield and that's a certainty. So start thinking in those numbers, look for competitive advantages if you want real investing in businesses. Check my stock market research platform. I research businesses. It's my independent full-time job that I do. I have a stock market research platform. My researchers are there and I'm looking for businesses with competitive advantages, tailwinds that will do well in the future. On Sunday, I'll make another video about Exxon to show you how I go about analyzing individual potential investments. But also check everything on my research platform, see if that fits your investment style and your current investment needs. And to conclude, I'm really, really pushing the message here, long-term, long-term businesses, not stocks. Thank you for watching. Looking forward to a comment, subscribe, like, share, please, so that we grow with this channel and we try to help as many people as possible because the noise in the investment world is so big that unfortunately the curd is getting misled into something that's not good for them long-term. Thank you and I'll see you in the next video.