What's up guys, YoungShkreli in the building
Warren Buffett has said that when he dies he wants his family's money to be put into an index fund. Warren Buffett and it seems like everyone else these days is in love with the index fund. I think buying an index fund is stupid - that's right stupid (sometimes).
What is YoungShkreli on about? I mean, does he really think he knows anything? He's an idiot we all know that!
Well guys, I don't mind if anyone thinks I am an idiot because I am not a genius and I am not an original thinker here, I am just applying what I've read and understand.
Here's the deal, my brother and I did the calculations recently (seriously we actually do that) and we found that the average pe ratio of the top american companies was about 23. What does that mean to us? Well, the two books that I base my value investing ideologies (indeed warren buffet does too) are: The Intelligent Investor and Security Analysis. In those books it says that it is UNACCEPTABLE to be buying stocks above ~20 pe ratio and I agree. This doesn't mean you will lose money every time you do, it just means it's not a good strategy.
So, by Warren Buffet's own logic, the index funds are currently not worth investing in because they are overvalued. Full stop. So why does he keep telling people to buy index funds??? (hint: it's not because he is evil) It's because they are generally speaking good investments in the long run. Warren Buffett tells us this because he wants us to think in THE LONG RUN and not about speculating in short moves. It's truly a wise ideology and practical advise, but it's the dumbed down version of the truth.
My job here is not to talk down to you, it's to give you sound advice based on what I know.
SUMMARY:
Index funds are a great option for people because they are diverse and they seem to work in the long run, but the bottom line is that you can't buy something that is overvalued no matter what it is, it just doesn't make sense to do so. Let's not forget, the economy could crash 50% and it could stay below its all time highs for 20 years - what would that mean for you? A bad time.
TL;DR:
Index funds are sometimes overvalued - now is one of those times.
Good luck bros,
Young Shkreli
Warren Buffett has said that when he dies he wants his family's money to be put into an index fund. Warren Buffett and it seems like everyone else these days is in love with the index fund. I think buying an index fund is stupid - that's right stupid (sometimes).
What is YoungShkreli on about? I mean, does he really think he knows anything? He's an idiot we all know that!
Well guys, I don't mind if anyone thinks I am an idiot because I am not a genius and I am not an original thinker here, I am just applying what I've read and understand.
Here's the deal, my brother and I did the calculations recently (seriously we actually do that) and we found that the average pe ratio of the top american companies was about 23. What does that mean to us? Well, the two books that I base my value investing ideologies (indeed warren buffet does too) are: The Intelligent Investor and Security Analysis. In those books it says that it is UNACCEPTABLE to be buying stocks above ~20 pe ratio and I agree. This doesn't mean you will lose money every time you do, it just means it's not a good strategy.
So, by Warren Buffet's own logic, the index funds are currently not worth investing in because they are overvalued. Full stop. So why does he keep telling people to buy index funds??? (hint: it's not because he is evil) It's because they are generally speaking good investments in the long run. Warren Buffett tells us this because he wants us to think in THE LONG RUN and not about speculating in short moves. It's truly a wise ideology and practical advise, but it's the dumbed down version of the truth.
My job here is not to talk down to you, it's to give you sound advice based on what I know.
SUMMARY:
Index funds are a great option for people because they are diverse and they seem to work in the long run, but the bottom line is that you can't buy something that is overvalued no matter what it is, it just doesn't make sense to do so. Let's not forget, the economy could crash 50% and it could stay below its all time highs for 20 years - what would that mean for you? A bad time.
TL;DR:
Index funds are sometimes overvalued - now is one of those times.
Good luck bros,
Young Shkreli