 Good day fellow investors! Welcome to the news where we discuss what really matters when it comes to investing, not headlines, fundamentals, earnings, real developments, real information that helps you investing and that helps you make those really good decisions, despite cycles, despite headlines that deliver returns over the long term. In this video, to start the stock market news and first 2020 video and I wish you a great 2020, I have decided to discuss the difference between headlines and real fundamentals that really matter. There is so much headlines, so much stock market news because the news feed on that. They need to make sensational news to feed, to entertain you and that's what people watch. But when it comes to investing, we have to put the correct weight to what really matters. Let's start! We're going to quickly discuss the global news, what really happened in the world over the last years, 2019 and what the headlines are saying and you will see a big difference there. Then we're going to discuss the US and the Chinese economy as the two dominant economies. Also, global perspective, the markets, what happened to the market and what matters when it comes to going forward and investing. Let's start! It comes to global growth. Well, it will be 3.1% for 2019, which is excellent. The global economy grew 3.1%. Estimates were higher and then the headlines are crazy that the growth is falling short, recession, depression, not working and that's the difference between headlines and real news. Real news tell us the economies grew, there will be higher markets, more markets, the world is going forward, is developing, so all fine when it comes to investing and from an investing perspective. Headlines doom and gloom. Perfect example is India. The country grew at what? 5.5% this year, last year and that is terribly in the media. If we look here at the headline, India's economy came back down to earth, rarely has a major economy had such a humbling turn in fortunes. They grew 5.5% and that's a turn in fortune. So they did terribly, grew 5.5%. So news always miss up headlines and real investment news. Further, just look at what's going on with literacy. That percentage of people that can read and write is constantly increasing, which means that the world is becoming a better place, more knowledge, more sharing. And even if we go further, if we go at the number of people on the internet, more and more people use the internet and 250 million people have been new internet customers over the last year. So we are now at 50% of the population using internet. Over 10, 20, 30 years it will be close to 90% and even higher as it is in developed countries, which is insane. And just imagine how whatever happens, whether there is a recession, whether there is a short long-term recession, nobody knows, currency crisis. The world will go on and that's the most important news that you have to clear out from the noise of the headlines. The world is going forward and will keep going forward. When it comes to investing headlines, expectations, it's all about fear and greed. Why do we listen to news so much to the headlines? Because it feeds our fear and greed. When stocks go up, we want them to go up even more to be greedy. And when those go down, then we feed our panic. The news feeds our panic and then we usually, investors usually sell at a low point, wrong moment instead of doing the opposite. And that's how it works. And let me explain the real fundamental investing and the greed headline investing. Look at Apple. Apple's stock increased almost 100% over the last 12 months. That's something incredible. It was among the top 5 stocks per market capitalization in the world and then it increased and doubled in just 12 months. What changed in 12 months? Nothing. It's just that investors expected more growth, started expecting more growth and they see if Apple continues to grow in the next year, more than expected the stock price will go higher. So they are pushing that stock price. But when it comes to fundamentals, what really matters, earnings have been relatively flat. So the investor investing in earnings said, okay, at 14 times earnings, a year ago it was a bargain, but now at 28 times earnings or 27, 25, it's not a bargain anymore. And this is speculative headline investing versus real fundamental investing. And that's the noise you have to clear and to see clearly where you have to invest looking at fundamentals. At the end of the video, we'll give an overview of the market fundamentals, which will give you a clear indication of how to invest today. So let's look a little bit deeper at the economy, headlines, reality and then investing. If we start with the US, the main problem is of course debt. But debt-debt fuels a lot of things and before Christmas was the largest shopping day in American history, it was an amazing thing to see, okay, we are really at the peak. It's the best time ever because people have spent the most money ever. But then if we look at GDP, then we see that GDP growth is fueled by spending, which tells you something over the long term, which increases the risk. Because when it's based on spending, not other things, then it means that debt is increasing and that, you know, you get money now, but you have to pay it back later. And that's a big risk for the economy. And also for investing in the long term, perhaps because we might see things really, really change because we have now seen, okay, as soon as debt, as soon as that interest rate started when going up and that really became important, then the Fed started printing more money to ease the situation, to calm the situation, to support the economy again and promote spending. So whenever there will be trouble, the Fed will intervene immediately, print money, which means there will be more money in the system and those assets, like stocks, will go up as it has been the case over the last 12 months. However, those are the fundamentals, just one force that drives stock prices and investments. When you look at everything, don't look at the headlines, which is usually and has to be just one force. Look at a comprehensive picture and then you'll make your mind up easily where to invest. If we look at a few more economic indicators, the treasury spread is not more in negative territory. Now the yield curve is not inverted anymore, so it doesn't signal a recession going forward. But okay, you never know when a recession will come. Jobless claims, unemployment, very good. Corporate profit margins have been declining but are still very, very good. And it's logical that corporate profit margins decline when you have such a low unemployment rate lowest in history. So you have bad things but you have also good things. So on the US economy, you have good things and you have bad things. You have debt, you have low unemployment, you have growth. Okay, it's focused on consumer spending but then you also have the Fed that can print money and it's easing and postponing any kind of crisis, even mild possible crisis, which is the investment environment we invest in. It is uncharted waters, it will always be uncharted waters. We'll never know what can happen in the future and that's something to keep in mind. When you see those headlines, headlines have to be really confident, specific one message because people are attracted to that. Confusement, you never look smart but it is actually where we have to invest. We have to invest in uncharted waters, uncharted territories and then we have to assess the risk and reward which is always vague and vagueness is actually the environment you always have to invest in but you have to keep a rational mind. Let's go to China. If we look at China then debt is also a huge issue, huge problem that's piling up but if you look at the household debt, it's not that big. Private enterprises, okay, the biggest debt goes to state-owned enterprises that are used by the government to invest heavily in development, railroads, etc. However, debt is also state-owned enterprises, debt is again in one currency so China like the US can print out the issues and then also continue growing. Further, if you look at what China really did over the last 50 years, 40 years it eradicated poverty. From 85-90% people living in poverty it is almost going to zero in 2020 which is the most remarkable economic development in history of humanity. Further, energy consumption, energy production is growing especially they're investing in solar even when they cut the subsidies a year ago, a year and a half ago, still the investment growth is recovering which means that solar as a technology works and that's also something important when it comes to investing. If a technology works, no matter what happens to the economy you'll do well, so that's an interesting thing to note here. Now, when it comes to the investing reality we have seen that the markets did really, really well over the last year the SAP500 was up 30% in one year which is pretty good especially for those investors that don't have to buy more those will always love a crash but 30% up everybody looks happy, I'm neutral on that if it went down it would be better for me because I could buy more on the low but okay, however if we look at the markets situation now we see a lot of exuberance, this is just a chart we have seen the greed and fear chart, this is the dump money chart so where amateur investors are investing and what are they doing and they are very, very exuberant putting more money into the system not looking at fundamentals and looking at headlines okay, but if you look at fundamentals then you can see really what is going on and that's the key, if you look at the SAP500 price-to-earnings ratio it's 24 points something 24 it means that the earnings yield will be around 4 points something plus growth in earnings over time, that is your expected long-term return because stock prices will be related will be perfectly correlated to earnings in the long-term so if you are happy with a 4%, 5%, 6% return from investing over the very, very long-term and you constantly invest per month then the SAP500 is a great place to be if you want more then you have to look at okay, where can I find better earnings, better future earnings more margin of safety, better price-to-book values and that's what investing really is okay, the headlines, investing index funds, investing the SAP500 that's not a bad investment the question is whether you want to do good, just good or you want to do better, be more diversified, etc so if you look at SAP500 earnings earnings were let's say at 100 SAP500 points in 2007 now they are at 133 that's growth of just 2% so with everything that has been going on earnings just grew 2% the stock market doubled over the last 10 years because valuations went down because of lower interest rates but that can always change and the thing you have to focus on are fundamentals, earnings and your required return, what's the return that makes you happy another great piece of information is okay the market SAP500 is going up, index fund it's really good investment it has been a great investment over the last decade and therefore investment banks are dismissing investment analysts the number of analysts working in investment banks researchers, those that look at those businesses and make analysis, recommendations, stock prices look at the faults, look at the fallacies those keep going down, down and down this means that those who want better than 4-5% are now very well placed to beat the investment banks because the investment banks are not focused on finding great investments those are just focused on delivering what the market is doing and has been doing over the last decade so again just piece of information to give you a perspective on what's going on if you want to invest in businesses, learn how to invest in businesses subscribe to this channel, click that notification bell so that you get notified when there is a valuable video for you so to conclude there is always news, headlines and there are fundamentals and it's up to you whether you want to listen to the tempting, entertaining headlines or to the fundamentals fundamentals are pretty simple, pretty stable extremely boring, nothing changes that fast and then you have the headlines you can chase, return, trade if you're an investor, as I said, subscribe thank you, check the stock market free course in the links below and I'll see you in the next video and I hope you get to ask questions in the comments below