 So in the last video I discussed okay if I find value I buy it. Now the question is how to get to that value and I want to really make it quick and simply explain how to get to intrinsic value, what is marginal safety, what is value investing and use Apple as an example. So as a value investor you think okay what's the value, what is the final value if all things go wrong. Apple is an asset-light business so best thing to watch is cash flows. Let's see if we look at Apple's cash flows over the last 10 years okay 2008-09 just starting with the iPhone but since 2012 cash flows free cash flows for the company were 40 billion 44 49 69 billion 52 50 64 61 billion. So let's say that on average the Apple customer base will give the company about in this case what 50 55 billion dollars in free cash flows per year. If there is a recession, if there is a slowdown, if there is the iPhone cycle, if some phone isn't good, if Apple TV doesn't gain traction then it will be a little bit lower. The free cash flow will be 40 40 billion. If there is an explosion boom as Apple always has those cycles it will be 60 70 but as a value investor looking for a margin of safety I would say okay in the worst case scenario average earnings over the next 10 years average free cash flows will be 50 billion from Apple. So there will be ups and downs you will hear Apple bulls saying okay this will revolutionize something payments TV or something you will hear Apple bears saying how Apple is dead blah blah blah blah blah but still there is what 1 billion customers 2 billion customers that are pretty loyal and they will continue to buy improve etc etc. So when it comes to that I would say okay margin of safety average over the long term now we are higher so I already from now the cash flows are 60 billion I go to 50 billion so I'll already give it a 20 percent margin of safety and 50 billion over the next 10 years on average and then who knows how much as an investor am I willing to pay for that. If you expect a 10 percent return from your investments then you're willing to pay 500 billion if you expect a 6 percent return from your investments then you're happy to pay 833 billion for the 50 billion in free cash flows. So and this is your margin of safety this is what would give you okay whatever happens with the market this is my return this is the business I own and this is simple value investing the core of value investing the core of margins of safety and you don't care what happens with the market what happens with whatever the news are the latest news are and you don't care that much about what's going on with the stock price when the stock price falls into your bucket margin of safety return on investment then you buy that's it I hope I was simple as value investing actually is very simple practically but you need to have the right mindset to close down shut the door to all the noise and simply look at value in the worst case scenario when the stock price hits that number of yours that you think okay this is the intrinsic value in the worst case scenario then you simply buy and you leave the upside to whatever the market might do thank you for watching looking forward to comments and I'll see you in the next video