Transcript
0:00 Nokia stock did really well over the last year. And then there was this great comment how it's painful to see an investor that didn't buy Marvel at 80, now it's 240, that didn't buy Nokia at 340, now at 14. It is painful. You can keep going or giving up. And I would strongly disagree. This is not investing. Buying Nokia at four is not investing. It's just speculation. So, the question is here, am I a speculator?
0:33 Am I emotional about others making money while I'm not? Or am I a true investor? That's the essence of what I do. Then we have other comments. 7% of Berkshire likely long-term return is not good enough. Why not go for S&P 500 that gives 11, which is better than Berkshire? We have discussed the risks here. And Berkshire has 400 billion in cash, while you're looking for better returns. We can check just on Nokia. If we look at the numbers there, the P ratio now is 92. The dividend is 1%. Is it speculation on hype or fundamentals? Well, with a P ratio of 92, it might be just speculation. Why are you not feeling the pain of missing the 5x on Beyond Meat that 3 years ago, 4 years ago, most YouTubers went for? And here comes the key difference. Owning businesses versus chasing stock prices jumps. Nokia was the same business as it is now, as it is last year, for the last 6 years. Owning Nokia from 2020 to 2024 would be painful. That's the difference.
1:47 Owning businesses and chasing stock prices. This is my value investment quadrant. We have return on the X axis, risk on the Y The upper quadrant is the best buy. And now, for YouTube educational purposes, it's pretty much empty. But, if I compare that to the February 2025, there were significant things as those were cheaper from a business perspective. And we bought some of that, some of you bought Samsung, did really well, and that is for me investing. And there was a great comment here, I was speculator before then Buffett Munger, not losing money. A lot of investors on the channel have been investing in the 2000s, lost a lot of money, and that is how it works. For further discussions of investing, conviction, finding 5x stocks versus business ownership, check my full conviction video.
Summary
- Nokia's stock performance is contrasted with Marvel's, illustrating the pain of missed investment opportunities.
- The speaker argues that buying Nokia at its current low price is more speculation than true investing.
- A comparison is made between Berkshire Hathaway's long-term returns and the S&P 500, emphasizing the value of cash reserves.
- The high P/E ratio of Nokia (92) raises questions about whether its current valuation is based on hype or fundamentals.
- The speaker differentiates between owning a business and chasing stock price jumps, stressing the importance of long-term value.
- The value investment quadrant is introduced, highlighting the best investment opportunities that are currently scarce.
- Personal anecdotes are shared about past investment experiences and the lessons learned from them.
- The speaker encourages viewers to focus on business ownership and conviction in their investment strategies.