This is Planet Money from NPR.

Hey everyone, welcome back to season 2 of Planet Money Summer School.

The finance education that tries to quickly show you how to make lots of money slowly.

Today's episode, index funds, and a billionaire's big bet.

My name is Cardiff Garcia and every Wednesday until Labor Day, we are presenting you with a new lesson about the principles of investing, featuring some of our favorite episodes from the Planet Money Archives.

And a lot of new stuff too.

Last week in class 1, we asked the question, where do stock prices come from and we learned two theories with competing answers.

In this week's class, we're asking a new question.

Which stocks should I buy?

Remember, investing is about the trade-off between risk and reward.

You can't make money without exposing yourself to the possibility of losing money.

And today, we are going to learn about a strategy for picking stocks that is stunningly simple, but also kind of like a magic trick when it comes to giving you more reward for the risk that you take.

And we'll hear from the inventor of this strategy and about all the doubters who fought back against his big idea.

This dramatic turning point in financial history is explained in a classic Planet Money episode that first aired in 2016, hosted by David Kestinbaum and Jacob Goldstein, and stick around after the episode.

Because we are going to then discuss the deeper investment lessons from the episode with our Planet Money Summer School professors.

Here it is.

Carol Lumis has known Warren Buffett for a long time.

We've been friends for, how many are 33, 16, 40, and 50 years.

We've been friends for 50 years.

Lumis is a reporter. She worked for Decades at Fortune Magazine.

Warren Buffett, of course, CEO of Berkshire Hathaway, legendary investor, also third richest man on the planet.

What kind of stuff do you do together?

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