 Good day, fellow investors. Let me start by saying that if you want to be the average, don't watch this video because it's time for me to really stand up and fight this crazy index fund investing mania that has taken over the investment world. The main problem is that people have given the financial responsibility of their own financial lives into the hands of the market, which is the herd, which is everybody else. Look at your neighbors, look at all the people that live around you. And if you invest in index funds, you have given the responsibility for your financial life into their hands because their hands are the market. And there are a few things extremely dangerous that are developing that I want to discuss in this video. Not thinking is not good because you fail to learn and develop. This leads you to missing on many other opportunities over your lifetime. Secondly, not taking responsibility for your own financial well-being, you'll get the average. You can do much, much better. For E, financial silver atrophy, very, very big disease today. What has worked in the past three decades will not work in the next three. And it's extremely possible to beat the market, especially this market. And it's even easier to reach amazing investment returns overall in your life. So let me start by index investing. A big chunk, the big majority of the money now invested simply goes into index funds. Everybody thinks, okay, index funds have done really good over the last 45 years. Everybody is promoting them. Everybody is high on index funds. And then simply put more money into index funds and index funds continue to do better. But let me show you something. This is the SAP 500 price earnings ratio from 1982 since index funds have been doing really well till today. And you can see that the price earnings ratio, the earnings yield, the business yield you get from the investment went from 7.73 in 1982 to 25.14 today. If I would put the price earnings ratio of 7 to the current SAP 500 earnings of 110.98 points, the SAP 500 level would be at 857.87, which implies a 69% decline. Sounds impossible? Well, stocks would just be back to where those were 2009, 2002 and 1997. So the decline is there, is immense and is possible. We have had examples in the past of what happens when people start giving their lives their responsibility into the hands of the herd. And that was usually called communism, which didn't end well. So probably this also won't end well. And perhaps even if it ends well, you will get the average. But since when is the average okay? If you have kids, if your parents never wanted you to be average, they always want you to go to the best schools to have the best grades, to learn as much as you can. And the goal is always not to be the average you can be, the goal is to be the best you can be, no matter what other people do. And now in finances, everybody is selling investing index, index, index funds, be the average, it will be good. Why? Why shouldn't you look for investment returns that are the best for you? And that mindless investment mindset to just accept the average is crazy for me. This leads to financial atrophy. Your mind simply stops thinking about finances, stops thinking about what is better, what is the risk reward, what happens in this world. And then people keep doing stupid things over the rest of their lives and don't see investment opportunities and don't understand scams, don't differentiate between scams and good investment opportunities because their financial mind has atrophied. For example, I'm amazed by people that buy real estate and they look at two properties and then they buy one because it's too much of an effort to think about those kind of things. But it's not too much of an effort to work 20 years to pay for that mortgage, to pay for that house. Too much of an effort to buy a house to invest a week, a month, for six months to understand how real estate work, how interest rate work, what's better, that's too much of an effort. Because their mind, their financial minds are gone. They have evaporated thanks to the mindless investing that we just do what everybody else does. And the government will save us if things go wrong. That might also happen, but you can do much, much better. Further, I really believe that there is a chance that investing in index funds is just another fad, because since 1982, Vanguard was founded in 1976, got traction in the 1980s, because a rising tide lifts all boats. And interest rates were around 15% in 1982 and they are now down to 1.75 and have been close to zero for the past eight, nine years. So if you can get a 15% yield from the government, you want a 20% yield from stocks, which translates into price earnings ratio of five, which is one-fifth of the current price earnings ratio, which would lead the S&P 500 to be one fifth of the current. So we have had 35 years of good years for index funds, but there was a rising tide. Now interest rates have started to go up. We'll see what will happen with currencies. Will there be more inflation or not? Will we see the same thing that we have seen prior to 1982, from 1962 to 1982, where stocks have gone nowhere adjusted for inflation? Now we start even from a higher level, so that's even riskier. And my point is, okay, if you want to invest in index funds, at least look at what you're investing, see if that is good for you, what is the risk reward and then make your decision, but at least look. I firmly believe that as interest rates start increasing, thinking, looking, deciding, risk reward will become more and more valuable. And this leads us to the everlasting debate. Can you beat the market? Yes, you can, but you have to take responsibility for your financial life. And I might be biased because I have been beating the market for the past 16 years. My returns from stocks is about 18%, not even to mention the returns from real estate, because my mind looks for opportunities. And when you look for opportunities, I find them. If you simply say, I don't want to look for opportunities, you won't find them and you will get the average, which might be good, but you can do so much better if you're willing to take a little bit of responsibility and effort, put effort in what you're doing. Let me share with you what Buffett has to say about this. The question is about diversification and I've got a dual answer to that. If you are not a professional investor, if your goal is not to manage money in such a way as to get a significantly better return than the world, then I believe in extreme diversification. So I believe 98 or 99%, maybe more than 99% of people who invest should extensively diversify and not trade. So that leads them to an index fund type of decision with very low cost, because all they're going to do is own a part of America. And they made a decision and only part of America is worthwhile. I don't quarrel with that at all. That is the way they should approach it unless they want to bring an intensity to the game to make a decision and start evaluating businesses. But once you're in the business of evaluating businesses and you decide that you're going to bring the effort and intensity and time involved to get that job done, then I think that diversification is a terrible mistake at any degree. And I got to ask that question when I was at Sun Trust the other day. If you really know businesses, you probably shouldn't know more than six of them. If you can identify six wonderful businesses, that is all the diversification you need and you're going to make a lot of money. And I will guarantee you that going into a seventh one is going to, rather than putting more money in your first one, it's got to be a terrible mistake. Very few people have gotten rich on their seventh best idea. But a lot of people got rich on their best idea. So I would say that for anybody working with normal capital who really knows the businesses they've gone into, six is plenty. And I probably have half of it in what I like the best. I don't diversify personally. And all the people I know that have done well, with the exception of what we mentioned Walter Schloss here earlier, Walter diversifies a lot. He owns a little of everything. I call him Noah. He's got two of everything. Yeah. So the question is, do you want to be the one or two percent of the population or do you want to be the 98 percent? If you want to be the 98 percent, then you have nothing to do on this channel. Thank you for watching. Say, say hi if you see me on the streets, but don't watch this channel anymore. If you want to be the one and two percent, then continue watching. We are going to do well, beat the market, get to extremely good investment returns for you. My point is that if everybody goes for the average, that's not good. If everybody would go for being better, we would make a better world. And that's my goal. I'll go to be the best I can be. And I think that I'm improving the world by being the best I can be. So I'll do my best to help all of those who are interested in being the best they can be, at least in the financial world. And I'll close with Robert Frost, two roads diverged in a wood and I took the one less traveled by. And that has made all the difference. Thank you for watching. See you in the next video.