Investments from the Austrian perspective with Francisco García Paramés

"Investments from the Austrian perspective" with Francisco García ParamésFrancisco García Paramés needs no introduction. Considered "European Warren Buffett", she became a legend after making Bestinver the most profitable fund manager in recent decades. Currently, as you probably already know, he is preparing a new project at the head of the manager Cobas Assett Management.

To learn from this great investor, I bring you a talk entitled “Investing from the Austrian perspective”, in which Paramés explains his investment style. In this article you can see the talk by Francisco García Paramés along with my selection of outstanding phrases from it.

"Investments from the Austrian perspective" by Francisco García Paramés

Video of the talk "Investments from the Austrian perspective" by Francisco García Paramés at the Francisco Marroquín University in Guatemala.

About investing in banking

“From the year 2.008 to 2.012 we have not had shares in any bank. In general we don't like it. "

"A bank, deep down, is an entity in which not even the directors themselves know what is happening."

About China

"Its growth is healthy, based on work, productivity and savings"

About fixed income

"I personally will never be nor have I been an investor in fixed income because I will never have the intention of being a creditor of any politician"

"Every state, practically at one point or another, has gone bankrupt."

"For no 20-year period, at least in the US, has investing in bonds been more profitable in real terms than investing in stocks."

About his book

"If someone gets an idea out of the book, let it be, please, invest in real assets and stocks."

About inflation

"You have to defend yourself against the loss of value of the currency."

“It is a black or white danger. You don't realize until you have it on you. "

On his way of managing forex

“We don't handle it. We don't care exactly the same. "

On investing in family businesses

“We always give a preponderance to companies controlled by families. First, because it is their heritage and they will take good care of it. And second, because they have the same time horizon that we have. "

About investing in cyclical business

"In cyclical stocks, the huge advantage you have is that you know what the problem is: the cycle."

About investing against the tide

"Is not easy. The herd goes one way and you go the other. "

"Going against others hurts physically."

About the circle of competence

"It is very important not to go beyond what one can control and know what the size of your circle is."

About diversification

“My first investment, in the Spanish subsidiary of Nissan, was a total disaster. And I had 50% of my savings at the time. "

"You learn by blows that you have to diversify, that even in those situations in which you are more convinced, something like Volkswagen can happen to you."

“In Spain we have always had portfolio concentration. We have had 5 or 6 securities with 7% or 8% of the portfolio in each security. "

About your valuation method

“I have on the table a calculation that adds, subtracts, multiplies and divides. We never discount cash flows. "

About the elevator sector

"We really like the elevator business because they are natural monopolies."

On hedging with derivatives

“We buy good assets below their price. Why put on the table an annual 2% with the 'hedge'? It does not make any sense."

"In the end, what you lose for the currency you gain for the price because changes in currencies are usually reflected quite well in prices."