 I'm getting greedy. Really greedy. Buying, buying and buying. Am I the crazy one? Or the market is really right. Terrible news. Stock markets will crash. Economic collapse. Depression. Whatever. You name it. Worse. Bio wars. This and that. It will be terrible. But then again I'm getting greedy. What to do? Good day, fellow investors. Welcome to the stock market news with the long-term fundamental twist where we give a realistic perspective to things, different perspectives and then it's up to you to choose what to do and how does that best fit your portfolio and your financial goals. It's your money after all and you have to make the best decision for yourself. My decision might not be your decision. And today I really want to discuss something starting from the news at the top and how those news go into money flows. What is the second line there? How money flows, the fed, consumption, everything works, impacts the market. Then I will discuss risk, which is the risk of permanent capital loss when it comes to investing and uncertainty, the fundamentals. I'm finding cheap stocks. That's why I'm buying. I'm not buying the market. Let's say I'm buying what is cheap. And then further, if you want to go into market timing, selling now, how that evolves, how that works in the cycle of investing, fundamentals, compounding, market timing based on news. Let's immediately start with the news. Click the like button. Really appreciate it if you do so for the channel, supports the channel, subscribe to this channel, if you will like this perspective that we give here on stock market crashes, investing economy and also stock analysis. Let's start. Let's start immediately with something really, really nice. This is the stock market since the 1900s and tell me when was the best time to buy stocks. If we look here, the best time was at the end of the great oppression. Thus terrible, terrible news. Then the next best time was at the middle of the world war, second world war. America was actually losing the world war and up till then, then things turned around. But again, the best time to buy stocks. Then after the second world war into the recession, again, the best times to buy stocks when things were really, really ugly. Vietnam war at the end of it, stock flation, oil shocks. Then we had Black Monday. Again, a great time to buy stocks and of course the global financial crisis. The current situation doesn't even show on this chart because it's really, really minimal for now. Will things get ugly or not? That's the question we have to give an answer to. Or are we at the best time to buy stocks or not? And if we look at the news, the IMF says economic outlook worsened since forecast in April. Terrible employment news. 20 million unemployed for April. Really layoffs in leisure transportation construction. 20.5 million really Americans lost their jobs. In Europe, the situation is also very, very bad. The projections, especially for the southern parts, the dependent tourism, are for GDP declines of more than 10%, 5%, 6%, 7%, 4%, Germany, for the 2020 forecast. And this will impact stock markets. This will impact investments. This will impact everything. And therefore, perhaps it's better to sell because there is a stock market crash coming ahead. And you might want to take advantage of that when it comes. However, also when we look at the decline, yes, it will be big in 2020, but stock markets are always anticipating. And also the projections, the forecasts are that economies will recover in 2021. And if those recover, we might see also better situations, better numbers, etc. So there is always a plus and a minus side when it comes to investing. And it's not about knowing which one will happen. It's about knowing how will one or the other impact you and your financial goals. On top of the bad news, countries are doing whatever they can to get out of the situation. They are taking a lot of debt. Again, the southern countries are really, really indebted. So they will really have big repercussions from the current situation if the eurozone doesn't help them. Similarly, in the United States, there is also a lot of debt. We discussed that in other videos. And the real GDP change for now, the Congressional Budget Office projections are 45.6% decline and then a recovery of 2.8% in 2021. So the situation is bad and will be bad. This is where I live, five kilometers from here. And it's really the top touristic city village of the country. And this was the situation yesterday when we went for a walk. Really beautiful day, empty, empty. This will have severe repercussions on whatever we are seeing, whatever we are doing. And the situation, yes, is really bad. But when it comes to investing, we have to look, okay, these are the news that we just quickly covered now, but then there are money flows. Then there are other investment options. Okay, where should I put my money now? What is the risk reward? And that's something very important when it comes to investing. Even more important than the news, because you are investing now to get cash flows from today to eternity. And that's how you have to position yourself. And that's actually why I am being greedy. And I'm not the only one, because despite whatever has been going on, the six months change in the SAP 500 index is just 5%. That's ridiculous for the amount of bad news we have seen. Why doesn't the market crash 30, 50, 60%. Well, first interest rates hit zero. When interest rates hit zero, valuations are actually unlimited. And here we see the 10 year treasury of the United States is just a 0.72%. That's negative territory if you include inflation. So if you own bonds and if you want to make some money, then stocks are far, far more attractive as an investment, despite the current economic situation or interruption, as Buffett called it. Then also just a note here on other investments, Ford's credit rating has been cut to junk with a negative outlook. GM is issuing bonds with a 6.35 percentage points above treasuries, just 7. something that's really junk yields, which means that the market doesn't have faith in the industry. It knows it's a cyclical and it knows it will be bad. So more bad news, but then there is still this valuation and some might look for protection. Not in these extremely cyclical stocks and we'll discuss later about stocks and where stocks are cheap. And then again about money, flows and news, the best buys are made at the worst. Why did we see a bull market and why are the stocks falling more? Because look at this. This is again the 10 year treasury. In March 2009, it was 2008, it was still at 4%. So you could get protection from the government. Really, let's say the risk free rate was about 3-4%. At the worst point it was 2.5, 2. something, but then it quickly went to 4. And then people said, let me get here 4%. Who cares about stocks? And they were selling. Now we are at 0.73%, very low, below inflation rate. And they say, okay, I'm not selling my real assets, real businesses, because this is really ridiculous and I'm losing money. Also, because of the low interest rates over time, look at the S&P 500 total returns. And that's because the flow of money went into equities, not into other things, not into, also not into emerging markets or because, and that might be wrong, but went to US equities. And once the flow of money starts, there is no stopping until something big happens and nothing big has happened yet, especially as the Fed is printing money. So US stocks drive the biggest global equity inflows. This is 2019 and things continue to look like that. So really US stocks have been dominant this decade because of the low interest rates and because of the growth and quality companies and everything. But I'm buying stocks. I'm not buying that much US equities, but look at this. You can find some cheap stocks around the world. The United States cyclically adjusted price earnings ratio that takes into account 10 year of earnings is about 26. That's pretty high on a historical level. But then Mexico, it's just 15. Brazil, 14. Germany, again, 15. China, 14%. Despite the growth, if we look at the price earnings ratio, it's 11. And then not even mention Russia with the price earnings ratio of five. And some companies paying dividends of 15%. So if you look globally, you can find, especially now quality for cheap as the money flows are going all into the United States. Those are going out of many of these countries. And you can find bargains for long term. And here is the country per country discussion from star capital point DE. We have Russia extremely cheap, high dividend yields, Korea, Singapore, Austria, all countries that we will take a look as if they stay cheap like this, perhaps you can find one, two, three good businesses. And that's why I'm getting greedy. I'm looking for the baby that's thrown out with a bathwater. And now I really want to discuss something extremely important, risk and uncertainty. The market and people don't really get the difference between risk, permanent capital loss, okay? And what is uncertainty? Risk is, okay, if this goes bad, I lose my money. Uncertainty and where I like to invest in is, okay, if I buy this now, it might not make any money for the next two, three, four years. But I know that in the next 10 years, it will make a lot of money. So it's not whether it will survive or not. It's more whether when it will make money somewhere in the future, it will make money and I will get my nice return. And I try to find low risk, high uncertainty situations, not high risk situations. And that's also something to keep in mind and something to differentiate when you hear those news, risk and uncertainty. Let me explain this more in depth because it's so crucial. For example, let's say you own a copper mine. So you own a bit in the ground, a hole in the ground, and you are mining copper. Let's say you can do that for another 30 years of copper mining ahead. The cost of production is $1.5 per pound and the company has no debt. Your company has no debt. So no matter the copper environment, you are still making money. This is copper prices over the last year, 2.8 per pound. The bottom was 2.1 and also over the last 10 years didn't go lower than 2. So if you have low cost of production, you will always make some money no matter the situation. So your risk is low. How much money you will make? You don't know. Let's say you own the Escondida mine. This is the copper cost curve production. And you can see here 25% of mines have costs higher than $2. These guys are in trouble now. And the others have costs on average between $1 and $2. And these guys are really cheap. They don't really care what is the price. They can make money anywhere anyway. And then you see, okay, if you are here, you make a little bit money. Let's say you make $1 billion here. If the price is higher, you make $2 billion. If the price is even higher, you make $3 billion. But there is no risk because in a bad year, you will make $1 billion. In a good year, you will make $3 billion. So the uncertainty is high because you don't know when you will make $3 billion, but you know you will make money. And that's uncertainty versus risk. And if I find investments that are high uncertainty, low risk, I buy them within any environment. And this is what being a business owner is. You look at the very long term over the next five, 10 years, and you look at the business, and then you say, I like this business. Compare it to the prices. I like this business at these prices. Can this business survive for the next two, three years? Yes, others will go bankrupt. So the business will emerge even stronger if that happens. If the stock crashes more, I get some dividends because it's a good business, still making money. I get some dividends, reinvest, and then wait for the upside because investing in the markets are always cyclical. And we already know that this thing, this situation will pass. There will be vaccines. There will be something. And they are printing a lot of money so that they are making the situation actually, the money flows better and better. As said, perks of being a business owner, inflation is the way to pay off coronavirus debt. If we look at high debts after the Second World War, inflation on average from 1946 to 1955 was 4.2%. It's reduced the federal debt to GDP ratio, but by almost 40% within a decade. And their target is 2% inflation. If they slowly increase that to 4%, or if they don't even tell you that they are going to push it to 4% and keep it at 3%, 4%, then in 10, 5, 10 years, 20 years, the debt issues might be solved with just a little bit of more of money printing and inflation. Those perks go to business owners, the rich get richer. So I prefer to stay invested in this case. And then also something discussing inflation, stock market charts you never saw from Professor Edward McQuarrie, Livy School of Business, Santa Clara. He discusses how a 10,000 investment would turn, I adjusted this for the current situation, to 27 million in the last, what, 95 years. If we deduct dividends and inflation, then it would be only 120,000. Given that there is chances that there will be inflation in the future, I prefer to stay invested rather than risking timing the market and missing this upside, because I am not invested. I don't have the dividends. I don't allow for compounding over dividends in inflation, business growth, etc. This is the difference. And this is a risk I'm not willing to take, even if the market crashes over the next, I don't know, 6, 12 months to years. If the market crashes, I'll simply try to buy more. So we discuss the news, the money flows, the risks and the uncertainty, what is core when it comes to investing. We discuss the fundamentals that there are some cheap stocks out there. What is the key of long-term compounding reinvesting? I'll still touch on the trends. And then here is the market timing. If you are afraid of a crash, okay, then you're timing the market. But then you have to see, okay, I'm listening to the news and I'm trying to time the market. You might be wrong sometime. You might be right sometime. That's the issue. But then you lose at the compounding. Let me show you this on the market timing. And then I'll finish with a trend. These are the news. US loses AAA credit rating after the SAP 500 downgrade. The agency said the deficit reduction plan passed by the US Congress on Tuesday did not go far enough. The downgrade could erode investors confidence in the world's largest economy. It's already struggling with huge debts, unemployment and 9.1% and fears of a possible double deep recession. The US has been pulled back from the brink of default. But its worries are far from over. See how poor growth and acoustic cost consumer spending are dodging the world's largest economy. Let me show you the date here, 6 August 2011. So, if you look at the news, terrible news, we should all sell. Also unemployment rate, 9% manufacturing going down, high debt levels, extreme debt levels that will push the economy, the country into bankruptcy. If you print money, you can't go bankrupt if you print your own money. So that's something illogical. But these were the news and many sold. You can see here the SAP 500 touching 1500 points, then going down to 1100 or 1200, something like that, 19% decline because of the worries in 2011. Terrible situation. Now imagine how those fields that sold here, they missed the compounding, they missed the growth over the last decade waiting for these levels. This is investing versus market timing. We don't know how it will look like now, but if you find cheap businesses, you might want to stick with them. And then something else, this is middle class population, 2000s, 1.5 billion, 2015, 3 billion people, 2013, 10 years expected to pass 5.5 billion people. So 2 billion people will be added to the middle class. Middle class houses, cars, computers, growth, education, travel, that's the world we are going into the next decade. You have to see whether you want to be invested in that. There is communication. We can hire now someone from India that increases the wealth there. You get someone that's working on the cheap for you and it equalizes and it works. And the global environment is getting more and more global, no matter the temporary interruptions or whatever. So see how that fits you. Where are you here on the scale? Do you want to listen to the news? Do you want to time the market? See how that fits your financial goals and then make the decisions. Also, if you like this, please click like, subscribe to this channel. Oh, let me know. I have researched the steel sector over the last weeks and I also have a very interesting 5G, COVID, glass making, car, autonomous drive stock. Let me know which stock you would like or even better, click like. If we reach 3000 likes on this video, I'll make a video about both. Check my website for my book, my research, my free investment course, see what fits you and how maybe I can add value to your financial life. Thank you and I'll see you in the next video.