 Good day, fellow investors. There is one article that holds more investing wisdom than most of the content put around on investing all over the world in one year. And that content is Buffett's 1984 article, The Super Investors of Graham and Doddsville. Buffett wrote an article presented at Columbia Business School, where he depicted the investing returns from 1953 to 1983 from the best value investors that came out of the Graham value investing school. And that's the best Buffett we can listen to, because it was not yet the political, the hypocrite Buffett that's telling people to buy the SAP 500 constantly over time, while he never bought it. And while he's sitting now on $100 billion in cash, why doesn't he buy the SAP 500? Ask yourself. Nevertheless, let's dig into the article, let's summarize it and give the most important investing points to take out in order to learn as much as possible. So the main point of the article is that in the 30-year time span, all those investors use different techniques, but audited track records show that they all had beaten the market in a 30-year time span, even if they use different techniques related to value investing. Walter Schloss, he was looking at a lot of businesses enormously diversified, but he just looked, okay, am I paying less than what the business would be valued to a private owner? So would the private owner buy out the business at a higher price? As long as he found businesses that were trading at a discount to a buyout price or to what a private owner would pay, he bought them. Huge diversification over the long term he outperformed the market. Don Knapp, the founder of Tweedy Brown, he also was very diversified, but here and there he would take over a complete business and then unlock the value. Again, different strategy, but always based on a margin of safety. He'll ruin the founder of Sequoia, he worked with huge amounts of money, and therefore he focused only in looking for value in large companies. Charlie Munger focused on just a few companies extremely concentrated, extremely volatile, so high risk we would call it from academia, but when Munger does something there was no risk with huge upside. Other investors like Rick Guerin and Sten Parameter were focusing on buying stocks where they were getting more value for what they focused on buying stocks where they were getting more value than what they are paying for. Very simple. So since Buffett made this article public in 1984, Berkshire has outperformed the SAP 500 by a huge margin. So even if it's public, we all know what beats the market, what leads to investment returns, high investment returns, nobody followed Buffett, nobody listened in 1984, nobody is doing it still because perhaps we have something twisted in ourselves that doesn't allow us to follow the simple things, we want to complicate life, we want drama, and we look for such investments then that are not the best risk reward situations. The main points from the article are extremely simple. There are two factors you have to look at. One is value and the second one is price and the discrepancies between value and price. That's it. When the value is much higher than the price you buy. When it gets bigger you buy more. When it's the other way around you sell and that's it. But the most important thing is focus on the value on the margin of safety and then compare it to the price. Look at the risks of course and that's it. That's the whole investment philosophy from Buffett from all the other value investors applied anywhere in different sectors as we have discussed prior to this. Factors like the beta coefficient, covariances, technical analysis, efficient markets, 200-day moving averages and all that kind of things are completely irrelevant to a value investor. Those things probably work only for a small number of people that really know what they're doing. A part-time investor should focus on a margin of safety and value investing because over 40 years he will do well. Also what Buffett discussed a very important concept. We will reiterate the concept constantly on this channel, the concept of risk. Risk is not a function of volatility as many see it. Many ask, oh will the stock price go lower or lower? Nobody knows that. Risk is a function of price. The lower is the price in relation to the intrinsic value, the lower is the risk. The higher is the price, the higher is the risk. Thus the SAP 500 now is three times more risky than it was in 2009. However, if you look back at what was going on in 2009 up to March we can see huge outflows from the SAP 500 ETF measured in billions. However, the inflows later were measured just in millions when the situation was starting to recover. Now, inflows are again measured in billions. Now, when the prices are high, thus according to Buffett the risk is high. But of course nobody wants to listen. Better for Buffett, there will be more things to buy when the stock market crashes. And remember he has 100 billion waiting. Just a quick look at the book values. The book values are just going higher and higher. Thus means the margin of safety is lower and lower. The intrinsic value is going lower. The book values are staggering from companies like Apple, Microsoft, Facebook. Just look at what are the book values and what's the margin of safety there. Of course, nobody watches, nobody cares because value investing is old-fashioned. We'll see. So the conclusion is very simple. The risk of an investment is a function of the discrepancy between the stock price and the intrinsic value. Stock price below, no risk. Stock price above, higher risk. Look at your portfolio, look at what you own, look what's the intrinsic value. Look at what would be the price to give you a 10% earnings return over the long term. And then compare it to what you are paying and what you are now. Perhaps you will rethink your positions. Remember Buffett has 100 billion in cash now. Sitting and waiting. He's not stupid. He knows why he has so much money sitting. So also value investing is totally uncool now. Nobody likes value investing. It's not hot, it's not Snapchat, it's not Facebook, it's not Nvidia, it's not Alibaba, it's not Amazon. It's totally uncool. Of course, being a value investor hurts because you see other people getting richer. But do you still remember the ones that got rich in the 2000.com bust? No. So think about it. But we remember Buffett. We talk about Munger. We talk about all the value investors because they are still rich. So think about when allocating proportions to your portfolio and looking at the risk reward and of course sleep well at night. Thank you for watching. Looking forward to your comments about Graham and Doddsville. Read it online. It's free for everybody. So it would be a great read if you haven't read it already. If you have, then it's a great reminder. I'll see you in the next video.