Transcript
0:00 Great question here. Does value investing beat the market? And let's look at the market. I started investing in 2002. I am getting older, but 25 years of investing have taught me something. And the market over that period did annualized with dividends great 10% per year. The S&P 500 did it 7x over 25 years. Now, I did 30-40x, and that is the key of investing. The S&P 500 has done great the last 17 years, but in the first 7 years of my investing, the S&P 500 lost 50%. I was fortunate. I invested in a frontier market. I did 5x with my portfolio in the first 6 years. Then from a value investing perspective, it got too expensive, and I sold most of it. Waited till 2009. Again, it was inexpensive.
0:53 Bought again, did 5x. That's 25, then another 2-3x recently. So, I did really much better than the S&P 500. And since I've been doing that publicly on my research platform, I have done my 15% per year since 2018. Similarly to the market, but on completely different fundamentals. You can check that on my research platform in the links in the description. So, when it comes to beating the market, will we beat the market again? That depends on what the market does. When it comes to investing, the key is to have a strategy that you invest no matter what the market does, and you do well. You own businesses.
1:34 Because the market, yes, did great the last 17 years, but on the same chart on Google, you have great 17 years, and you have a terrible 9 years with a negative 53%. As value investors, we want to do okay no matter what the market does. That's the core of what we do. We own businesses. We invest earnings, cash flows, dividends, and we actually don't care what the market does. Eventually, we end up beating the market, but it doesn't really matter. The goal is to reach your financial goals in life, your retirement with the highest level of certainty and the minimal level of risk.
2:16 What will happen with the market? I simply don't care. If you also don't want to care about markets, check what I do on my channel.
Summary
- The speaker has achieved annualized returns of 30-40x since starting to invest in 2002, outperforming the S&P 500's 10% annualized return.
- Early in their investing career, they capitalized on a frontier market, achieving a 5x return in the first six years.
- They strategically sold investments when they became too expensive and reinvested during market downturns, notably in 2009.
- Since 2018, they have maintained a 15% annual return through a research platform.
- The speaker argues that value investing allows for stability regardless of market conditions, focusing on cash flows and dividends.
- They stress that the ultimate goal is to achieve financial objectives with minimal risk, rather than simply beating the market.
- The speaker encourages viewers to adopt a long-term investment strategy that prioritizes business ownership over market performance.