Stock Market Consulting – May 2018 (Value Investing FM)

Like every month, here is the stock exchange office where Adrián Godás and I answer questions from listeners in May 2018. On this occasion, we deal with issues such as compound interest, the reliability of financial means, copying other investors , profitability ratios, diversification o investment in raw materials.

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Stock Market Consulting - May 2018

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Questions from the May 2018 Stock Exchange Consultation

On how to take advantage of compound interest when investing in the stock market

I've been following this page recently, and the only thing I can tell you is that you do an incredible job and that I'm learning a lot from the courses. For this, I must thank you and congratulate you.

Next I wanted to ask you some questions that are a bit of a beginner, but it is to clarify.

The first, regarding the compound interest in the shares. The only way to take advantage of it is by reinvesting the dividends generated by the company, right? Because following the value investing strategy, you don't sell until the security reaches its intrinsic value, and during that period you only get income from dividends, right?

(Javier Crespo)

On the reliability of financial means

I also wanted to ask you another question regarding which companies to start valuing. Once I have the necessary training, I would like to start investing following this investment model, but I don't really know where to start. For example, when reading the financial press, many times they talk about companies that can go up and such. Is the information on these pages such as Expansión, El economista or Five days to invest reliable, or, being private media, do they have some perverse interests?

(Javier Crespo)

Recommended Article: How To Lose More Than 87% In 8 Years With Bad Investment Recommendations

On copying other investors

And finally, a third question. Given that there are currently large investors, and that the information on their investments is practically public, although with certain temporary delays, is it not a good strategy to copy large investors like Buffett and thus achieve returns similar to yours?

Thanks again for the courses and help, and I look forward to an answer.

A greeting.

(Javier Crespo)

About the risk of investing in the stock market

Hi Paco, sorry that all the teachers tuterte during the career have told me that the percentage of people who earn in the stock market is very low and that you have to have a lot of preparation and that for there to be people who earn money in the stock market others have it Losing this is what makes me think about investing money in the stock market, you know how fearful money is, you can give your opinion on this matter. Thank you very much


About brokers

Thank you very much for answering me. I am aware, nothing to invest in very new or fashionable sectors. When is a podcast about brokers?


On exposing investment ideas on the podcast

Congratulations on the podcast. I find it very educational and it is very pleasant to listen to you! And if you proposed an investment idea for the listeners, explaining it and developing all the investment ideas for the listeners, explaining it and developing all the steps? It is a suggestion… Thank you very much and so on.


About value investment through ETFs

I throw a question to have what you think. Is it possible to invest in value-style ETFs? I heard there are. Name one if possible. It's a good idea?


About AliBaba

What is your opinion of the Alibaba company? Could you comment on their ratios?


On the price of oil and gasoline

One question, why if the price of a barrel of oil falls 50%, the price of gasoline does not fall by the same percentage?


On investing in the beer sector

What do you think of the case of Molson Coors Brewing? The beer sector in Canada-USA can be a very value opportunity now… (also AB InBev)

(Ed Lar)

On issues of transparency for fund managers

I leave you a question to discuss in the next office. Why do Value managers explain their medium / long-term investment thesis in their quarterly letters? Isn't it throwing stones at your roof? Anyone can copy them and be "Value" effortlessly. PS: Enjoy Omaha !!

(Manuel Fernández)

On profitability ratios (ROCE, ROIC and CFROI)

Hello and congratulations on the podcast. I leave you some questions for the next office.- ROCE vs ROIC. Which one do you prefer and why? If you can also comment about the CFROI, why it is less famous and its calculation difficulty-

(Roberto Lisart)

About accounting analysis in raw materials companies

For Adrian, you could talk about the relationship between maintenance capex and depreciation in the commodities sector, especially oil if possible, but use other sectors to compare if it is illustrative. A greeting, and until the next consultation.

(Roberto Lisart)

About diversification

Hi, a question for the following office: Imagine that you buy a share and over the years it has multiplied by a good amount, say by 7 or 8, and this share has a very large weight in the portfolio. However, you still consider that there is potential ahead, what would you do, sell part of this position and readjust weights of the portfolio or let the profits run at the cost of less diversification?

A greeting!

(Álvaro GR)