[Music]

at the same time you can get

much higher returns than 10 you can get

20 30

40 50 returns a year investing in the

stock market if

you know how to pick the right stocks if

you know how to pick the stocks of the

fundamentally best companies

and buy them at the right time so that's

what i do for living that's why i teach

my students

so what are the best companies to buy

that will thrive

under inflation that would beat

inflation by a white margin so these are

some of the criterias number one

i focus on businesses that are

pandemic-proof

and recession-proof companies so in

other words even if the pandemic lasts

for 10 more years the companies will

continue

to grow their sales and profits and

their recession-proof so these are

what we call secular growth companies or

defensive companies companies like

amazon

facebook and adobe and salesforce

these are the companies which i invest

in the next thing is this

now again not all companies will do well

under high inflation

companies that do well are those that

are able to raise their

prices of their goods and services

above inflation so in other words if

inflation rises by two percent

the company can raise their products by

four percent

now not all companies can do that only

companies

with high pricing power

and pricing power comes when a company

has got what we call a brand monopoly

like a nike like a ferrari for example

so companies with strong brands

they are able to constantly price their

products higher than inflation

so it doesn't matter how much inflation

there is they will always grow their

sales and profits

in real terms the next thing that is

really important is this

to beat inflation you want to invest in

companies

that require very little capital

expenditure to grow

and maintain their competitive

advantages

and that's why i tend to avoid companies

in manufacturing

in the shipping in construction

in development property development why

because they require the constant

reinvestment of capital and because of

inflation

the capital investment gets higher and

higher they will eat up

are higher sales doesn't make sense so i

want companies where you invest

one time and they've got the brand their

assets are intangible

and they require very little future

investment

so when you invest in great companies

again

you won't just get 10 a year again 10 is

only just buying the index

and idiot can do that but when you live

to pick the right companies you can grow

your investments by

you know 20 30 40 50

a year or even in some is even 100 in

fact if you take a look at my personal

investment portfolio year to date 2021

for the first four months

you can see year to date let me just

show you year to date

i'm up 13.8 percent for the first four

months and for the last one year

i'm up about

110 and this is just one of my many many

portfolios

another portfolio i have is right over

here

so this one again year to date i'm up

about

10.5 percent and for the last one year

this portfolio has grown 91 percent

so like i said if you pick the right

companies you can get

huge returns on average in a year

and it's not just me who can get it all

my students are able to achieve this

because they've

learned the right strategies of value

momentum investing in fact

it's really happy to see a very nice

message from one of my students

over the weekend let me just show that

to you yup so this is one of my telegram

groups and this was sent by um

n right so that's n over there and she

said

uh and by the way she just posted a

portfolio right here

you can see in her portfolio she got

31.44

uh in the last couple of months

and she said last year during the

lockdown i spent time

studying adam's courses my friends and

family said i should have saved my money

instead of

wasting money on costly online courses

because

there are tons of free videos online i

told them i could make

at least fifteen to twenty percent

return but if

but they said that's only for

experienced investors but today

when my portfolio is up 30 and

and now they all ask me to manage their

savings money

right 2020 is still the best year of my

life because i was lucky enough to

discover adam

and had a lot of free time learning from

his courses

so again the best investment you can

make is investing first in yourself

and then investing into assets that can

beat inflation

and to grow your financial wealth

besides businesses the other

asset that beats inflation grows your

wealth would be real estate

so i believe that everyone has to own

businesses

everyone has to own real estate why

because

land prices property values and rental

income

always rise alongside or higher than

inflation especially if you buy high

quality

real estate assets right

so again you can buy physical property

but again if it's beyond your budget to

buy

apartments and all those things you can

buy reits

real estate investment trust so with

reits with a couple of hundred dollars

you can buy

shares in a portfolio of real estate

all around the world and earn rental

income

and so one of the indexes that you can

look at

to represent real estate would be the

dow jones

all read index trust if you take a look

at the last 18 years now i can't go back

more than 18 years because

it started 18 years ago right so since

inception for the last 18 years

the dow jones retrust has returned 10.12

on average a year so it's very much in

part

with the general stock market

another very common asset used to hitch

inflation

would be gold now you can't really buy

physical gold to hitch

inflation it's going to be too

cumbersome right so normally we buy

gold etfs and etf that tracks gold

prices but i'm not really a fan of gold

and the reason is because gold is not a

productive

asset i only like to invest in

productive assets

what does that mean a productive asset

is something that you buy that produces

something in fact to me the intrinsic

value of an

asset what an asset is really worth is

based on what it can produce

so for example if you buy a business or

you

own a business it produces cash flow

which you can use to pay dividends or

retain the earnings in the business

it makes something if you uh own

property

it generates rental income so it makes

something

but if you own a piece of gold gold

doesn't make anything it just

sits there and looks pretty alright so

you can hold gold for

20 30 years at the end of 30 years it's

still a piece of gold

but if you own property for 30 years at

the end of the 30 years you have the

same property

but you also collect all the rental

income over the years

same thing the business so again i only

like productive assets

so when an asset is not productive when

it doesn't make anything

it has no real intrinsic value

in a way so its value is purely

speculative so what goal is worth

is purely psychological it's what people

are willing to pay for it so it's very

much based on

demand and supply so it's very hard to

value goal

in that way so that's one reason i don't

like it the other reason is if you look

at the last

30 years gold has

an average return of 5.1 percent

cagr compounded annual growth rate for

the last 30 years

so comparing with businesses stocks and

real estate

gold's return is half of those returns

now not only does it have less than

those returns

but it has one of the highest

volatilities as well

so if you look at this chart over here

you can see that goal

not only doesn't have the highest

returns but in terms of

standard deviation which is a measure of

volatility it's got the highest

volatility so

i'm not a fan of gold so let's take a

look at how they have performed in

relation to each other so again this is

the last 30 years

and over here you can see right at the

bottom you've got the

again the inflation index the cpi so you

just gotta beat that

so pretty easy goal itself you can see

beats the inflation rate but like i said

i'm not a fan of gold but again holding

gold is better than just holding cash

but beating gold would be the s p 500

index

now the next chart will show you reits

as well and again

this is the last 18 years because the

read index only goes back 18 years and

you can see that

again the all-time winner would be the

smp 500 the 500

biggest companies in the united states

followed by reits which represents real

estate in the u.s

uh gold and finally that all beats

inflation

okay so there you have it these are the

best assets that's going to beat

inflation and build your wealth

over many many generations to come okay

now i

know some of you are thinking right now

wait a minute how about bitcoin

how about cryptocurrency you can't

ignore that you're blasphemous

i've gotta talk about it fine i'll talk

about cryptocurrencies talk about

bitcoin although you guys know i'm not

really a big fan

now sure we can't ignore bitcoin

slash cryptocurrencies in fact uh in the

last one

year bitcoin itself has gone from 8 000

u.s to now

60 000 u.s so that's about what 800

of your money in one year so how can you

not talk about bitcoin

fine i'll talk about it right now like

in everything there are

advantages and disadvantages pros and

cons in any asset

so what are the advantages of bitcoin

obviously number one

crazy price appreciation again 800 in

one year

who doesn't want a piece of that action

so why has bitcoin become

so popular because uh one of the major

arguments is that it's a good

replacement to

fiat currency which is the us dollar the

euro the japanese yen because fiat

currency there's no

backing from gold or anything right so

because of that

central banks can print unlimited

amounts of fiat currency

and they can be devalued over time

whereas for bitcoin

no one can print more bitcoin well

theoretically because it's a finite

number which is 21 million bitcoins

right now there's already 18 million in

circulation so there's another

three more million that can be mined and

once that's dead that's that you can't

have any more bitcoin so

in other words people find it attractive

because there's a limited number of

bitcoins you can't have more bitcoins

versus you can have more us dollars more

euros you can have them more bitcoins

right so supply is limited so as long as

demand goes up

the price should keep going up and

that's the theory behind

the popularity of bitcoin right can't be

devalued by central banks

it's a private decentralized ledger uh

and it's a goal-like alternative asset

to hitch against inflation

so that's what's great about bitcoin no

doubt about it

before buying any asset you can't just

look at

the upside you can look at what's the

downside what are the risks of that

asset

so bitcoin and cryptocurrencies in

general they have risks

the first major risk is that again it's

not a productive asset

just like gold bitcoin it doesn't

produce anything it doesn't make

anything

so because of that cryptocurrencies and

bitcoin has

zero intrinsic value it's got no

intrinsic value

like i said intrinsic value comes

from what the asset can produce if you

own a farm it produces

crops if you own a business it produces

cash flow

if you own real estate it produces

rental income but

bitcoin doesn't make and it doesn't

produce anything so there's no intrinsic

value

and again the only value it has is a

psychological value it is worth

what people are willing to pay for it

and by definition cryptocurrency

and bitcoin they are not really

currencies by strict definition now how

do you define a currency

to be a currency there are two criteria

that must be met number one

it must be a widespread store of value

all right and as of now bitcoin is not

widely adopted as a store of value so

there are people who buy bitcoin to

store their wealth but it's not

widespread and the reason is because of

the huge volatility

as long as volatility is huge you can go

up you know 20

down 30 percent not many big

institutions are willing

to use that as a store of value because

it's too uncertain

the second thing is for to be a currency

it must be a widespread

medium of exchange where you can use it

to buy

you know clothes or buy candy or buy

food and stuff like that sure i mean

now elon musk is saying you can buy a

car with with bitcoin and sure there are

people who are offering that but again

it's not widely adopted think about it

you buy bitcoin not because you want to

use it to buy something else

not really right unless it's not a

cryptocurrency you don't buy bitcoin to

really store your wealth

you buy bitcoin for one reason only

because you're hoping to sell it at a

higher price

so to me it's a purely a speculative

asset

the way i look at it right now so that's

one of the concerns that i have so when

something has got no intrinsic value

you have no idea what it's really worth

and it's really hard to value something

to put a number to

its true intrinsic value i feel

uncomfortable buying something like that

the next thing is this now if bitcoin or

cryptocurrencies

really become widely adopted let's say

one day people are using to buy stuff

people are using it to store their value

is that good maybe not because then it

will it will

threaten governments of the world now

governments of the world

they want a monopoly over currency

once they see that bitcoin becomes a

credible threat it's not yet a threat

but what's

a threat guess what they're gonna do

there's gonna be a high chance

the governments of the world are gonna

ban and outlaw

and confiscate bitcoins you don't think

it's gonna happen

it happened in 1933. in 1933

when the us government decided to get

the us dollar off the gold standard

they confiscated everyone's goal

and if you didn't give your goal to the

government you had to go to prison

this was the executive order by the

president of the united states

on first may 1933. give me all your gold

if you don't

it's ten years imprisonment you know my

great great granddaddy gave me this

newspaper article

i'm just kidding i just got it off the

internet so

it could happen to cryptocurrencies

could happen to bitcoin you never know

the next risk is that bitcoin is a very

highly leveraged asset so a lot of

people around the world who have bought

bitcoin and who are pushing the price

up to astronomical levels they have

actually bought a lot of money

to buy bitcoin so it's very highly

leveraged

although you may not leverage buying

bitcoin so what's the point when an

asset has a lot of leverage behind it

the moment

the bubble bursts and the price drops it

will drop

like a stone and that's why bitcoin is

extremely volatile because of the

the high leverage behind the price

movement

finally again the main argument is that

bitcoin

is scarce the only 21 million bitcoins

you can create more

in theory but here's the thing nothing

is stopping

programmers or other people from

creating alternative

digital currencies to replace bitcoin

now

i'm a firm believer in blockchain

technology i believe that blockchain

is the future but it may not be

eventually bitcoin that becomes the

medium of exchange

there could be future newly evolved

cryptocurrencies

uh in fact created by governments right

digital currencies created by

china or the us that will replace

bitcoin eventually

using the blockchain system so in other

words to me i think the scarcity concept

is an illusion all right new ones can

come along to replace

bitcoin or ethereum in the future so if

bitcoin

really becomes widely adopted in the

future if it really works out let's say

what's the potential upside well let's

do some calculations

currently bitcoin has a market

capitalization of 1.2 trillion so in

other words

you take the price of one bitcoin

multiplied by the number of bitcoins

in total 21 million you get 1.2 trillion

dollars

currently the total market cap of all

the gold in the world

that's been mined is 13 trillion

so currently bitcoin makes up about

roughly about seven percent of the

market cap of gold

so if bitcoin can become the new goal

eventually and it can be a credible

replacement to

goal as an alternative asset let's say

in the future

bitcoin uh will make up 50

of gold's market cap in other words

people around the world will move

50 of what they use to own in gold to

bitcoin if that happens

then bitcoin um

could reach a market cap of

six to about 6.5 trillion all right

so based on 6.5 trillion if you divide

it by 21 million bitcoins

that gives us an upside target of

and seventy five 375 dollars per bitcoin

so at current prices

the upside would be a 500 increase

if everything goes as planned right

but remember when when you invest in

something

don't just think about how much you can

make

you got to think about how much you can

lose what if

happens what if bitcoin doesn't become

widely adopted as a medium of exchange

what if people soon realize that it's

nothing but a big bubble that bursts

what if governments confiscate

all the bitcoins in the world and then

bitcoin what happens then well then

bitcoin could drop

80 to 90 to maybe six to 12

000 from where it is today so people ask

me this question all the time adam

should i buy

bitcoin cryptocurrencies and the answer

is

it depends if you're willing to lose 80

of your money with the hope of making

500

go ahead right so it really depends on

your objectives and your risk tolerance

this is up to you

now for me you guys know that i'm a

chicken i'm a chicken

i rather not make money if i've got a

chance of losing money

you know i'm like that right so i

believe in rule number one never lose

money

rule number two don't forget rule number

one and because of that

i don't invest in bitcoin because i

don't even want the possibility of

losing money

you see when i buy stocks of great

businesses

to me the downside is zero i cannot lose

money on stocks

because when you buy good companies sure

in the short term they could go up they

could go down they could drop thirty

forty percent of short term but in the

long run it always goes up stock market

always goes up because you're buying

companies that are producing goods and

services people always need

goods and services when you buy real

estate it always goes up in the long run

but for bitcoin cryptocurrency there is

a downside

and so because of that yes i have bought

a bid

many years ago i've got some bitcoins

and ethereum just leave it there

like a lottery ticket like a 40 ticket

if it goes to zero i don't really care

but to me it's not an investment it's

just a punt it's a lottery ticket right

but when it comes to investing

my real money my big money you know i

stay away and it's just me

call me a chicken but i know i'll be a

live chicken in 10 or 20 years

so i hope you enjoyed it hope you've

learned something good questions

comment below and i'll see you in the

next video

if you want to catch my latest videos

click on the subscribe button

right now click on the bell so you get

instant notifications

once i upload my latest video if you

want to check out my

online courses go to piranhaprofits.com

we're going to learn how to invest and

how to trade the financial markets and

create an income from all around the

world

if you want to join my live wealth

academy program

go on to wealth academy global.com and

find out more about how you can learn

investing and trading

live online this is adam cool and may

the markets be with you