Stock Market Consulting – June 2019 (Value Investing FM)

Consultorio Bursatil June 2019

Stock exchange consultation for June 2019 in which Adrián Godás and Paco Lodeiro answer questions from listeners.

On this occasion, we dealt with topics such as risk investment management in our portfolios, incentives for rising prices in companies, our talk at Value School, sustainable investments, introductory books on finance and investing, follow-up of stocks , registration and sale of shares or live on income.

We also talk about companies and sectors such as steel, palladium, Honma Golf, Alphabet, Burford Capital, Energy Fuels, 232 and Orezone Gold.

Tabla de contenido

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    You can attach your question in audio by recording it through Vocaroo and attaching the corresponding link.

    General Questions from the June Stock Exchange Consultation

    About our riskiest investments

    In general, what percentage of your portfolios do you dedicate to those “riskier” ideas that can have higher returns?

    Do these types of actions usually give good results?

    You could give us an example that you currently have or know.


    On incentives in price increases

    Good! I have a question (not related to the podcast, sorry :-)) that may still go to a "Consultorio Bursatil" if you consider it appropriate. The other day I was talking to a coworker about the company we work for and at some point he made a comment like: "They sure do that to control the market value a bit so that the shares do not go down." I realized that I had heard / read comments like that many times: that companies take actions thinking that the shares do not fall or even rise. I wondered: "How can the possible ups and downs of shares on the stock market affect a company, beyond keeping shareholders happy?" I'm probably missing some accounting concept to finish understanding the case. In the end, the exchange of shares happens between shareholders, without going through the company. If the shares go down, the main victim is the shareholder, if the shares go up, the main beneficiary is the shareholder. But the company? Does it affect you at all?


    About our talk at Value School

    Why haven't you posted your Value School entry yet? A greeting.


    On sustainable investments

    Are sustainable investments profitable?


    About introductory books to finance and investing

    Good afternoon. For the next office: my wife is a little bit almost allergic to financing issues and more focused on spiritual development, but she read “rich dad poor dad” and it opened a little fissure. The question is, which book do you recommend to make a wedge and which is more curious about saving / investing? A chochoista greeting.

    (Mario from Seville)

    On how we follow the actions

    Sometimes you say that you have this or that company on the radar, how do you follow them? I use Google finance, but I imagine there will be better alternatives.

    (Umboopa of Albacete)

    About the registration and sale of shares

    Good afternoon, I'm Juan, from Bilbao. A question for the office. Does each of the shares of a company have a code or identification number? Where and how is the ownership of the shares registered? Is there some kind of public record that can be consulted to verify the actual purchase and where it could be claimed in the event of the broker's bankruptcy? I understand that this is the role of the depositary company but I just can't find good information to document myself. Thanks for your program!

    (Juan de Bilbao)

    On living on rents

    I would like to live on income in the short term, at the moment I save funds, but I always have the same question: How to live day to day? Where does the rent come from to pay the bills? The funds are good to capitalize, but I would need another type of asset to generate that income. I am aware of Buffett's explanation of selling as it appreciates, but it does not convince me because it also forces you to sell in periods of undervaluation. So that, 1. If this idea of ​​having assets that generate income in addition to funds seems good to you. 2. What assets that generate an income do you know and do you think is a good idea 3. What do you do?


    Questions about companies and sectorsof the June stock exchange office

    About investing in steel

    A couple of months ago, Adrián Godás sentenced Acero in 3 seconds: "Investment in steel is crap, what competitive advantage does a steel company have?" What does he have to say to management companies such as Azvalor who do believe in this niche? Don't you think that competitive advantages can also be where they have the factory now that there are tariffs, or the technology and R&D?

    (Iván, a Galician from Madrid)

    About investing in palladium

    I would like to know your opinion about the palladium, if it could be time to enter ... Etfs, companies? ...

    (Rafael from Madrid)

    Sobre Honma Golf

    Hi. I'm Daniel, from Madrid. A question for the office. In the excellent episode of Javier Acción, a Japanese golf company (Honma Golf) was discussed. I have looked at it a bit and it looks very good: growth, high margins, high profitability on capital employed, good prospects for expansion in Europe, the US and Korea, net cash ... It also has the moat of the luxury brand, with willing customers to pay a premium for golf clubs that give them a little more performance, or simply that allow them to represent social status. And being a kind of Luis Vuitton of golf, it's pretty cheap in my opinion. I think it is the type of company that Paco likes. His biggest risk is perhaps that the owner is Chinese (although he has maintained the completely Japanese spirit of the company, with Japanese factory and employees, and seems a fairly reasonable guy). Have you taken a look at it?

    (Daniel from Madrid)

    About Alphabet

    Good afternoon. Question for the office. In the alphabet company I see that there are two types, one that says GOOGL and the other ABEC. The two are the same company the same? forgive my ignorance. Thank you very much

    (Josep Alba Zapater)

    About free cash flow at Burford Capital

    Hi. Thank you for your valuable lessons. The interviews of the last month are very interesting. I'm trying to understand balance sheets and income statements, and I'm intrigued by a topic about financial companies. Let's see if you can give me light. The clear example is Burford Capital: Profits go up and up, but the free cash flow of the last 6 years is negative and taking the last 10 years, those that have had a positive FCF have been so narrowly. How is this possible? The investors I try to surround myself with tell me that this can be the case in companies such as banks, finance companies, etc. I can't quite understand why. In my conception of the financial world, a company can have a negative FCF for a year or two even if it gives benefits for some investment or some extraordinary expense, but it does not seem logical to maintain it for so long.

    (Cide Hamete)

    About Energy Fuels

    Good afternoon, I'm Alberto from La Gomera, I've been looking at the Energy Fuels historical graph (uuuu). I have seen in the graph for example that for example in August 2003 it was trading at 5,75, and at the end of that year it was trading at 30. In January 2006 it was trading at 5,50, and at the end of that year it was at 230. Movements very abrupt in the price throughout its history. I wondered what exactly happened in those periods given as examples, and if these situations could be extrapolated to the current situation if 232 will prosper. Greetings.

    (Alberto from La Gomera)

    About 232

    What does Adrian think about 232?

    (All the world)

    Sobre Orezone gold

    Hello, how have the results of Orezone Gold been? Did the resources go to reserves as you thought?

    (Gustavo de Gandía)