https://m.youtube.com/watch?v=mfdOv1LMC ... e=youtu.be
0:49 I think the same investing rules/strategies apply from 50 years ago to 5 years ago to 20 years from now
0:54 You have to know what you own and you oughta have a good reason for owning it (through research)
1:22 You just have to have faith (that the stock market will get better)
2:21 I think stocks over the next 10 years will do better than money market funds and treasuries
2:52 When you own a stock, it's a share of a company, and (good) companies are gonna make a lot more money in 10, 20 years
2:58 That's why stocks go up (because the company makes more money)
5:08 Corporate profits have gone up x40 since World War 2 and the stock market's gone up x40
5:25 Not looking at the balance sheet (of a company) is a mistake
5:30 Look at assets and debt and find out what the net worth is
5:43 Let's say there are two different companies each selling for $4 a share, but one company has $100 million cash with no debt, while the other has no cash and $100 million debt (which is better?)
5:57 You can do this. If you got through 8th grade math and can get close to 8+8=16, you can do this
6:02 Look at a company's financial position. It's impossible to go bankrupt if you don't have any debt
6:36 Some of my mistakes is when I thought the stock was too high (so I sold, but then the stock went higher)
6:39 Think, what inning am I in?
6:42 I sold Toys-R-Us way too early - it went up 20x after I sold it. Same mistake (selling too early) with Home Depot
6:52 With cyclical companies, buy them when they're starting to do better, then when they're doing terrific, sell them
6:59 With growth companies, determine how many more years of growth they might have, before selling
7:35 You buy a company and you buy it to grow it
7:42 You better understand what they do
7:44 If they do well, the stock will do well, no matter what happens to the market
8:24 This is a funny business because you don't have to be right even 5 times out of 10 (to be profitable)
8:27 If the times you're right makes your money double or triple, it offsets all the times you lose 20% to 30%
8:32 When you buy a stock you oughta think, "how much can I lose? How much can I make?"
8:35 You oughta be able to make a lot, because stocks are risky
8:42 You can lose a lot in a stock
8:45 I want to buy a stock where if I'm right, it'll double or triple
9:04 I look historically at the economy, not at (trying to predict) the future
9:19 We've had 9 recessions since WW2 (12 or 13, now, as of April 2022)
9:41 I would never bet against the American economy
9:56 Technology companies are all a little bit different, unlike banks which are very similar
10:01 I'm looking for companies that are selling close to cash, are industry leaders, and are down -95%
11:01 American companies act fast and start cutting costs real quickly (during bad times)
11:12 American government runs surplus in good times and deficit in bad times
11:46 You're a terrible investor if you need your money back in a year
11:55 Should I have 10 different growth funds? That's silly
11:57 Get 2 or 3 growth funds
12:10 Stay with it. If one group does well for 2 or 3 years, your next bunch of money you should add it to the groups that are underperforming
12:16 Over time, different categories end up returning about the same
12:26 You can be switching forever and never make money (if you keep trying to time which group, sector, or fund will outperform)
12:39 1990 bear market when Saddam Hussein went to Kuwait, there was a recession and banks in trouble
13:05 1981/1982 was an ugly market too: 20% prime rate, double-digit inflation, double-digit unemployment
13:14 The 1973/1974 market
13:42 I think the government running a deficit is terrific, because if they're running (for example) a $200 billion surplus, that's $200 billion out of the economy, and if they run $100 billion deficit, they're pumping $100 billion into the economy
13:56 It's a healthy thing to have buffers in the economy.
14:16 Look at kids and how they don't know about economies and are optimistic about the future. You should be too. We'll be fine for the next 30, 40 years
Peter Lynch
