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Maicon Lima here, and I'm going to start speaking a little slower, otherwise nobody will understand anything I'm saying, so let's turn down the music. This is another video where we're going to talk about books. For those who don't know me, as I said, my name is Maicon Lima, and I'm the creator of this channel, "Start Investing from 0 to 100." In this unedited video, I'm going to talk about the book "Stocks For The Long Run" by Germes, as we constantly change here on the channel, but currently on Thursdays at 6:05 PM, I'll be talking about a book on investing that really helps you think better and grow financially.
A book about investing, about age, health, everything that helps you think better so you know how to really take care of your money. I don't know if you watch the Monday live streams, but so, the invitation is extended here. The description also includes a link for you to sign up to receive the course materials.
So every Monday I give a class on investing, and this class is free. I also have a course called "The Start Investing Method," and that course is paid. But anyway, let's talk about the book. I want to tell you before I start investing that when I started investing, what I thought the stock market was...
Well, I thought it was a way to make a lot of money. So I thought, "Great, I'll start buying some stocks here and I'll start making a lot of money." It turns out I worked in the financial market, and during that time I saw huge deals. And I'm not talking about a few thousand reais, I mean billions, millions of reais.
So at that time it seemed to me like I was going to take a bath here, it seemed like it was a way to make money fast. Now, over time, I ended up learning the following: one thing is a large, large stockbroker, a large bank—I'm trying to mention names here—or a large brokerage firm, whatever it is. It's not one thing, it's three things.
It's a legal entity, and it's something completely different. It was me as an investor; in a way, I had some privileged information, let's say, due to my knowledge, the environment I was in, the information they gave us. But even so, it wasn't easy to achieve profits above the standard index. And throughout this video, I'll tell you what that standard is.
Let me wrap this up, it's bothering you. Great! And if I can't achieve a very high number, especially in the short term, sometimes buying and selling stocks on the same day, let alone the individual trading very small amounts, sometimes even fractional amounts. It's not stainless steel, right? So, if you do n't know, lots are because stocks are traded in lots, usually 100 shares.
Now, when you buy just one or two shares, you're working in the fractional market. Now, if you work in the fractional market and don't have this information, it's quite difficult to actually make a profit. So, I studied, I read several books, especially in the beginning, books that showed how to do the so-called technical analysis.
Pause analysis. Technical analysis... but I saw that even with a lot of study it was difficult because the results... so what I did was I started studying books on, let's say, buying and holding a stock for a longer period, and I observed that yes, investors who hold the stock for a longer period reduce their risk and achieve good profitability if you compare it to government bonds, right, to Treasury Direct bonds, or if you compare it to savings accounts, fixed income, or more conservative investments.
So basically, there are two ways to invest: one taking a big risk in the short term, and the other taking a better risk in the long term. Because when you invest for the long term, the longer the term, automatically your risk will be diluted, automatically your risk will be reduced. At some points here I will replace the word "book," mainly with "video," and so on, but the point is that some books—I always say this when I talk about books—some books really changed my life.
So this book, "Stocks for the Long Term," or the book (it's here in the description), is " This book," yes, it showed quite important information. Regarding investing, this is one of the books that I can say helped improve my life. So, as I told you, if you want to know more about the book, don't forget that if you're watching on YouTube or Facebook, you can even buy the book through this link in the description.
By buying through this link, you help the channel. Just click there and the information will appear. It's about the book "Stocks for the Long Term," or let's talk about the book. So, I'm here to talk to you about the book. One of the things I highlighted here to bring to you is that it compares stocks over the last 200 years, from 1800 to now.
Look at the amount of information, the amount of knowledge! So, in the last 200 years, it shows that stocks, for example, have grown much more than government bonds. Remember that we are talking about American government bonds here in Brazil, but we have the direct treasury; it's a slightly different reality.
And Maicon Lima says that yes, stocks will also sell more than Brazilian government bonds, but it's good to have a portion... Government bonds. Hello, everything you're starting out with has good profitability and much greater security. It's powerful, it generated Mc Jerry. Jerry, I follow Jerry. He's a Finance professor, Germes, and I'm going to be the author of the book.
He's a Finance professor in Pennsylvania. Pennsylvania, an ugly man, right? The United States again, has such a beautiful name, but Pennsylvania, which is in the Northeast of the United States, obviously, right? And follow me. He says that stocks bring an average return of six to seven percent. If you take information from the last 200 years and do the math, six to seven percent per year.
This means that approximately every ten years your assets double. So what you have to understand from this, if you want to live off investments, means that your income approximately doubles every ten years. Now, if you study a little more, invest in stocks and value, this period can be reduced, or if you sometimes don't have much skill, don't have much time to choose the best value players, this return may even be a little higher.
Another thing he says in the book that I found quite interesting is that you should pay attention to few fund managers. I'll repeat, few fund managers manage to beat index funds. What are index funds? I'll leave that in the description, but to give you an idea, here in Brazil, our most important index is the Ibovespa index.
The Ibovespa index reflects the stocks of the largest companies. But what does that mean? And what does it mean? When you invest in a bad stock, invest in the stock of company X, company Y, and company Z, and you don't invest in funds that reflect the Ibovespa. This means that when you choose stocks separately, the fund managers are less than half of them, approximately one-third.
That is, few people manage to have a higher return than index funds. I'll explain a little more about index funds. What do you have here in Brazil that reflects the Ibovespa? You have, for example, BOVA11, GOV11, and there, when you talk about American companies, you have BOVA11, and also YINVB11. Another thing that is quite interesting, and that I bring from the books, is that stocks of large companies, consolidated companies, in my opinion, have low returns and constant dividends.
They tend to yield better results than stocks of companies with growth potential. What does that mean? Let's translate it into English. This means that you might think about investing in a small company like Havan, investing in that small company because it has a very high growth potential, and you can, of course, make a lot of money with it.
But statistically, when you look at a large amount of data, these companies with small growth potential—sorry, these small companies with growth potential—often, according to the book, have a high P/E ratio and often don't pay dividends. Why not? Because it has to invest in itself to grow. Well, that was the main information I brought from the book.
Don't forget to read the description. I hope you 're doing well. A big hug and see you in the next video. Bye bye bye!
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