 Good day, fellow investors. Last week, Warren Buffett's conference, and I made a summary video on it, and it got more than 75,000 views. I thank you for those views, and I especially thank you for those 2,500, 400 likes there. Really appreciate it, and really appreciate the support. But oh boy, oh boy, there were so many comments discussing. We'll touch also on that. Warren Buffett, is he too old? Should he retire? The mistake with airlines selling stocks, underperforming the SAP 500, and all that cheat and chattery that also pushed Berkshire's stock down last week. So that's something very important to understand. And there are a few topics that I really want to discuss here that really are the core of what investing is versus anything else. And therefore, we will discuss the comments and touch on cash flows, on what investing really is on risk and reward, especially comparing Berkshire to the SAP 500. Why Berkshire? Even if many say it didn't outperform, it didn't outperform, will always outperform the SAP 500 and has destroyed it in the past. And then I also want to discuss the mistake of selling airlines. So much focus goes on the selling airlines where Buffett lost $2 billion. So he lost $2 billion, put that on a 500 billion equity. He lost, what is that? $2 billion, 10%, 1%. He lost 0.05% of his portfolio. That is like you go for a cup of coffee. That's what he lost, but everybody is attacking Buffett. That's what we have to explain. And then also touch on, don't bet against America and selling airlines, which was one of the biggest comments and that we have to put into perspective. Let's start with the discussion. So it's very simple. Warren, your investing strategy is so simple. Why doesn't everyone just copy you? Is what Jeff Bezos asked? And Warren Buffett's answer was very simple because nobody wants to get rich slow. And if you want to get rich slow, please subscribe to this channel. This is where we get rich, slow, perhaps a little bit faster, but we will focus on getting rich. And that's about it. When we look at the comments, Berkshire versus the SAP 500, old outdated brain, I can't believe he sold the airlines. Buffett is just another market timer, time to retire. Still worshiping this last century man. And I think there were many, many comments about probably other billionaires that comment on Buffett because I wouldn't dare to make such comments until I am at least at his some level. So probably these guys have all the same wealth as, I think it's time to start accepting that the old man's wisdom is not any more valid in some aspects. He is still a renowned figure, but things change. Yes, things change or things don't change and remain always the same. Let's compare Berkshire, the performance, the business, the returns, the investments with the SAP 500. And everybody's saying Berkshire didn't outperform the SAP 500 in the last 10 years. Okay, it didn't outperform, but investing is about the risk and reward and you'll see and about the long-term compounding and you'll see whether Berkshire outperformed or not the SAP 500. And when you hear my perspective, please let me know in the comments whether it is convincing enough to convince you to make you understand that it is about investing, not about underperforming in the best bull market where everything, where the tide lifts all stocks. So let's start, five-year performance, it was pretty similar, so not much difference until the last week, I think, where the SAP 500 went up and due to the negative comments, Berkshire didn't go far. So similar, we can still call it similar performance. On 10-year performance, Berkshire is the blue line, SAP 500 is the red line, similar also if we go just a month back, the SAP 500 equal performance and now there was some divergence as Berkshire's stock went down and the SAP 500 went up. And the difference isn't that big a deal, I think now, but okay, let's say Berkshire underperformed the SAP 500 in the last 10 years. Oh, Buffett, yes, you should retire. Let's look a little bit more. 15-year performance here, Berkshire, clear divergence, especially during the bear market of 2008 and then later also, but Berkshire, 199% return, SAP 500, 141% return, over 15 years. If I go 20 years, Berkshire, 355% return, SAP 500, just 90% return. So yes, that's the great index fund over 20 years, but let's say, okay, there was the dot-com bubble. So let's go further, 25-year performance, Berkshire, 1,000%, that's 10x, SAP 500, also good, 468%. Let me go 30 years, Berkshire had to weigh 3,778% increase. SAP 500 still good at 737, but here we are already talking 4x improved performance. That's a huge difference. 40 years, Berkshire had to wait delivered 100,000, percent return, the SAP 500, 2,700 in numbers, that's 1,000x on your investment 40 years ago in Berkshire and 27x in the SAP 500. That's a huge difference. That's 30, 40 times out of performing the market. But yes, there are a lot of geniuses saying that Buffett is all outdated, but there are, as Bezos said, simple basic investment fundamentals that work always and then there is the trend, the market, the chasing, the being smart. That's not something that Buffett does and also not Berkshire. Let me explain what Berkshire is and why I think that Berkshire, even in the last 10 years, did better than the SAP 500 because investing is about risk and reward. So let's look at the shareholders' equity. Berkshire shareholders' equity, 2005, it was not that much difference in 2009, so if you take a 10 or 15 year period here is equal, but went from 91 billion to 375 billion dollars. That's the book value that Warren Buffett increased Berkshire's value over the last 10 or 15 years. So the book value, your real returns, the equity went up 4.12 times or 10% per year. That's Warren Buffett. That is what he promised to do, to increase book value for 10% per year for a long term and that's also what he is aiming to do now. And then if we look at the SAP 500 book value, it went from 414 to 1914. That's just 2.2X increase or 5.4% per year over 15 years. Yes, add 2% dividend, so we are at 7.4 return over time. 7.4 is much, much less than 10% that Buffett did. So Berkshire shareholder equity up 4.12 times, and he will likely continue to do so over the long term because if you're an investor, you have Berkshire. If not, you have the SAP 500. If you're more of a speculator because investing is about business, returns, book values, equities, and compounding. So he will likely continue to do so because of this. The market capitalization is 422 billion dollars, but if we look at the earnings, hidden and unhidden, that we discussed in another video that you have to watch if you're interested in investing in Berkshire, what are the real earnings Berkshire delivers, he will increase that book value by 32 billion in a normal year. If we also deduct the cash of 124 billion, then the price earnings ratio of Berkshire is 10, while the price earnings ratio of the SAP 500 is 20. So Berkshire earns double what the SAP 500 is earning and is also growing because it's set up like that to grow. So what do you want to own? The SAP 500 at the valuation of 20 with all the hottest businesses in the world, good, great businesses too, but at double the valuation that Berkshire is at much less cash than Berkshire has, and Berkshire isn't doing crazy buybacks and spending everything like there is no tomorrow, they are a financial fortress. So risk reward, you have a higher yield, but that's not interesting now in the market. Now in the market is all about growth and like it was always in all these bubbles, and you have Berkshire that's all about compounding that equity at 10%, which is the core of investing. And let me show you this, if Buffett would spend 100 billion, like every other company in the SAP 500 is doing, on buybacks, I think that the stock would double in the next six months. If he announces, okay, I'm going to spend 100 billion on buybacks over the next year, we could see the stock double immediately and then forget all about the outperformance discussions because Berkshire would outperform the SAP 500 by double immediately in whatever period, if he would spend that on buybacks, but he's an investor, he wants to compound that long-term cash that he has, that equity to create real value, not for speculators, but for his investors. So not speculating, but investing, that is what Warren Buffett does. And then, okay, he said it simply, it was my mistake, there was no more compounding, so we sold airlines because he thinks they'll chew up more money and that's not the investment he likes and that are not the investments that are in his portfolio and that have led to the great performance we have just shown. Let's see this, 2007 Berkshire shareholder letter. The worst sort of business is one that grows rapidly, requires significant capital to engender the growth and then earns little or no money, think airlines. Here, a durable competitive advantage has proven elusive ever since the days of the Wright brothers. Indeed, if a far-sighted capitalist has been present at Kitty Hawk, he would have done his successors a huge favor but by shooting or will down. And also, Warren Buffett would have saved two billion, invested in something else, double that money, so five, 10 billion would have been saved if someone shoot or will down at Kitty Hawk. He also bought US Air Preferred Stock in 1989, managed to sell for a hefty gain in 1998 when there was exuberance, this time it didn't work. And then something very funny, he says, but I'll make more mistakes in the future, you can bet on that. So investing is about making mistakes, accepting those mistakes and simply continuing. Let's talk more about the investment mistake he just made and then put it into perspective. So his mistake, he put in eight billion and let's say with the dividends, he sold about 30% lower, got some dividends, 30, 40% lower. Let's say he got out five billion by selling everything and he sold because it will not increase book value long-term, no compounding needs more cash, not an investment Buffett likes. So he prefers those investments that can compound and even a 2% difference of compounding over the long-term which Buffett is doing leads to such returns. This is a Sequoia example that I already showed, but 10,000, 2% difference is 1.4 million or 4.2 million in the very long-term compounding on earnings and that is Buffett's focus. What is he looking for? Where does he want to deploy his money? Let's see, C's candy bought for 25 million where when sales were 30 million and pre-tax earnings were less than 5 million. The capital required was 8 million to run the business. The company was constantly earning 60% pre-tax on invested capital. Last year sales were 383 million, pre-tax profits 82 million and the capital required to run the businesses just for the million. After paying taxes, we have used the rest to buy, the rest of the cash flow to buy attractive businesses just as Adam and Eve kickstarted an activity that led to 6 billion humans. C's has given birth to multiple new streams of cash flows. The biblical command to be fruitful and multiply is one we take seriously as Berkshire. And then let's see that biblical command, how it works when it comes to investing. This is something I made for my free stock market course when summarizing Peter Lynch. And let's look at an investment where you invest in 10 stocks. 10 stocks, let's say two go bankrupt, terrible mistakes, four, do nothing, again, bad mistakes. So you have made already six mistakes on 10 stocks but then stock number seven doubles, triples, gives you cash flows, stock number nine quadruples and stock number 10 in a period, I don't know, becomes a 10 beggar, let's say 10 years. So you have made six mistakes out of 10 but you are still up 2.3 times or almost 9% per year. And that is what investing is. You have to simply cut the losers and invest in those companies that will bring you more cash flows and allow for long-term compounding. That is what investing is. And that's also what Adam and Eve are telling Warren Buffett and what he wants to do with his money. Lastly, comments about not betting against America but selling aircrafts. And here I really want to discuss how you should invest in the best businesses in the world and that's what you are doing if you are investing in the SAP 500, if you're investing in America, Microsoft, Apple, Amazon, Facebook, Google, J&J, Berkshire, Visa, all great businesses, global businesses. So if you're an investor and you go bet against that and by betting, I mean selling, timing the market, that's something that Buffett says for most people is not something smart because they will lose their shirt long-term because these businesses will do good over time. There is no doubt about it. It's whether you will do good, great or enormously great. That's something else. But if you sell now, let's say, I sell everything I'm betting against America, it's unlikely that you'll do better than what is the benchmark in this case, the SAP 500. And I want to do a deep video on this. So on Sunday, I'll make a video why I'm not selling, why I'm buying stocks, even if you have extremely high unemployment, even if the economic data is not good and please subscribe, click that notification bell and I'll see you in that video on Sunday. Looking forward to your comments, what do you think? Have I convinced you about what investing is against speculating in the market, against buying just stocks so that they go up? What is compounding? Let me know if I managed to do that in the comments below. Thank you and don't forget to click that like button.