 Good day, fellow investors. Legendary investor Charlie Munger just spoke at his yearly daily journal annual meeting conference. It is a two-hour speech with a lot of Q&A, and then I thought, okay, what I can do because I really enjoy listening to Charlie Munger, even if he is older than 90 years, so it takes time and patience to listen. Well, I'm a stock market researcher. I have patience, but there were very interesting topics discussed, and I'm going to summarize those topics into this video. The current market situation, the economy, Tesla, how to stay rational. So let's start immediately just with a quick introduction in what the Daily Journal Corporation is. It's a company that Charlie Munger owns. He acquired that a long time ago, owning legal and other newspapers in California and around. Of course, the money that they made in the past was invested in other great businesses, so the stock price exploded thanks to compounding, which is exactly what Charlie Munger does. So listening to him, giving a great perspective, his eternal wisdom, giving a great perspective on what's going on in the market economy will give you great inputs on how to position yourself to really take advantage of what's going on and be well-off in your life-investing cycle. The business is legal niche for research and development. They are investing in software, to cater, to courts, etc. And part of the reason they have been successful according to Munger is because their competitors are awful. So also something very interesting, typical Charlie Munger. So I really think you're going to enjoy this summer. If you like Charlie Munger, he is also the main, let's say, thought when it comes to this channel. So please subscribe and click that notification bell. Now, journal, technology, everything is shifting. They have 250 employees focused on research. So it's very likely that they will keep making money in the future by improving efficiency for courts. And very typical for Munger and their businesses. They are not collecting any money on fees, upfront fees. They are collecting money only when the things they do work. Typical Charlie Munger. Always serve the customer, don't trick the customer. That's taking the high road in this environment, but it's far less crowded. And that's also how we have to invest, how we have to behave if you own a business. Now, let's start with the content from the market, from Tesla, from the economy. And then how to remain rational. The current market and situation, what's very interesting and something we have to be very careful about is listening to the news. Current news, according to market, is lying to Munger, is lying and misleading. It's like good magicians because they make you see things that are not happening and not see the real things that are happening from debt, deficits, wealth gaps that might lead to issues in the future. So it's very hard to stay rational when the news is irrational. They are selling you fear and politics is also doing that. And there is a lot that goes on and it's absolutely nuts, as Munger says. When we go into the market, there is a lot of questions. We're going to dig through them, computers and artificial intelligence getting better. What should investors do? He says, prepare for tougher times ahead. It will get tougher than it was 50, 60 years ago to invest. The index thing is going to run, run and run. Very interesting point from Munger. We can say index funds are irrational in this point of time, but it's something that has let's say low friction and therefore it's going to run and run. Nevertheless, keep thinking as a nerd and stick to it. Don't follow the crowd if you want to do really, really good. On the index fund recommendation and index funds and sell-off strategy, Munger says that those are great for most people, but don't gamble. A lot of people put all their money in the index funds because they think that cannot go down. And when you look at the chart over the last 10 years, yes, it cannot go down. But gambling your retirement on index funds going up another 50%, 100%, it's very risky and we have seen periods of time when index funds didn't do good at all, even for 25 years. So don't gamble, hold for the long term. And he says how in China people are constantly gambling with scatox, how the time of holding something is very, very short, which is stupid. Great troubles coming from those that gamble, be it in the stock market, be it with index funds. When we look at the US, the market, looking for quality businesses despite overvaluation. And then Munger says, OK, US, but stronger companies are not in America according to Munger. He has investments in China, you don't, he's right, you're wrong. And he invests in China with Lilu, where they find great investments there. But you have to really know how things work there. These topics were all over the two hours, I tried to systematize them into categories. China, the corporate standards, well, Munger says it is how it is, but look at how they are improving and keep over the improving. If they can get over the crazy love of gambling, that would be really great for Chinese. Then the question on tech, disrupting mode industries. And he says how that's normal, how modes have been breached time after time after time, from department stores, newspapers, auto industry, etc. So that's something that will continue to happen. You just have to find the real modes that will be there, and that will remain there for long, long term. On the comparison of tech stocks with the nifty-fifty of the 1960s, he says that it's not crazy yet that the nifty-fifty boom was complete dementia in the 1960s, because the current tech stocks are very valuable companies. But what he warns us about is about venture capital, the crazy acquisitions based on EBITDA, which is Munger keeps telling us is bullshit earnings, and that they should be careful buying all those new growth promising stocks at whatever valuation. More money, more deals, more fees for investment banks, and you have to really be careful who is driving there, because investment banks care only about fees, not that much about how much money you'll make in the future. And Sequoia did really well because it kept itself small. Then on private equity, again, using adjusted EBITDA, and all the metrics that don't work, and that is all stories, as we said, for charging fees. And he says that we will pay a big price eventually for all the excesses in the financial market. On Tesla, he says two things. I would never buy it and never go short. Never underestimate a man who overestimates himself. Musk is peculiar, he may overestimate himself, but he may not be wrong all the time. Therefore, Munger, as a rational investor, says simply stay away from it. On electric vehicles and BYD, other technologies, he says that EVs will be more popular, it's unlikely something else will come up for now. And even the Texas will get to be like California. So that's another point to the oil stocks analysis sector video that I made a week ago. And really, it's a very, very big headwind for oil. Also, on the question why BYD electric sales are down, well, the answer is that China reduced incentives and why Tesla sales are up, because Elon has convinced people that he can cure cancer. This is Charlie Munger, rational investor. So you are up, if you disagree, you're up with Charlie Munger, not with me, but I really enjoyed that comment. Then on the economy, budget deficits and inflation, all printed money, like crazy, they are buying assets. Inflation has been very low, economics is tricky and worthless. And I get a lot of questions, Sven, what about inflation? Will it go up, will it go down? And I agree with Munger, I can't give you an answer. And that's why you didn't see a video about, okay, what will happen with the hyperinflation or here or there? Just what might happen. I don't know what will happen. And the same is with Munger, he doesn't have an answer because nobody has an answer. So we have to do things and invest in a way that whatever happens, we are good. Whether the trade deficit is dangerous for the US and it should be positive, he simply says no and that we can discuss there into how much capital the US has globally exposure. So it can continue having a huge trade deficit. However, on the negative yields, those make Charlie Munger nervous, but there is no other choice. The danger is when people start overdoing and they will overdo it. And that's the nature of governments and people. Again, no idea what to do on that. Impact on insurance, typical Munger. Sometimes you really can't answer, you don't know. And that's also something, the very important message when it comes to investing. Nobody knows how things will work, the impact of low interest rates, high interest rates on insurance. There are so many factors there that you cannot know it. On the outlook for the global economy, slow down geopolitical risk, he mentions Japan and how despite the constant recessions, no growth, everything is clean there, there are no homeless, low unemployment, life is good. So we don't have to panic in thinking, okay, your recession will be extremely detrimental on life. And that's very, very important to keep in mind. Life goes on, life will improve no matter what the economics do. And if you have great investments just to add, you will also do great. Now, mental tricks, how to stay rational. If you can keep your head when all about you are losing theirs, then you can be a great investor to quote Rudyard Kipling. So the mental tricks to stay rational are take the high road because it's less crowded. So it might be less rewarding in the short term, but it's a winning road in the long term. Keep your head cool. Just keep doing what we are doing. Being a nerd, being risk averse, low risk, high reward. Forget about the politicians because their brains are cabbage. And remaining rational works over the long term over cycles. And if we are going to live like Charlie Munger up to 90, then it's better that we stay rational. Don't be a victim, be a survivor. How to live life, the question. Never feel like a victim. It's always very counterproductive. See what you can do with yourself and you can survive. And unfortunately, politicians build careers on victims, which can be very, very dangerous. I can confirm that because I have seen wars where I lived due to people being victimized and then going into war and doing stupid things. How to discard believes that you have. That's very important. When it comes to investing and in life, you have to recognize when you are wrong. Constantly reexamine, particularly when there is disconfirming evidence. It's hard to be rational, but we have to constantly work, constantly reexamine our ideas. But then again, here a lot of people will think, okay, if the stock price goes down, then you reexamine and then you see, okay, what's going on. The market might not be right. You might be right, despite what the market thinks. On parenting, just be an example. Teaching and telling your kids what to do doesn't work. How to remain rational. This is very interesting to use the inversion process. What would be a bad outcome and then stay away from bad outcomes. Makes you rational. So what would hurt India most easily? And then avoid doing that. Revert and avoid is what? So simply revert what you are doing and think, okay, what would be the worst outcome? Also when it comes to investing, what would be the worst outcome? Can I take it? If not, avoid it and go next. How to research a new company. If complex, leave it to others. Go and research there when you have an advantage over others. That's very likely what I do. I look for companies where others are not looking. Stock market analysts at big companies, big firms, investment firms are being sacked. Thousands and thousands have lost their jobs. So now researching companies really can give you an advantage. And also in countries where nobody looks like Russia or mining or solar was the case two years ago. So you have to find places where you are smart and wise and the rest is stupid. This gives you great advantage. How would Charlie Munger say it? God bless our stupid competitors. They make us rich. Thank you for watching. Subscribe to the channel. Looking forward to your comments in the comment section below. And I'll see you in tomorrow's video.