Stock Market Consulting – May 2020 (Value Investing FM)

Stock exchange consultation for May 2020 in which Adrián Godás and Paco Lodeiro answer questions from listeners.

On this occasion, we discuss topics such as the effect of currencies on the portfolio, such as downloading tax documents at Interactive Brokers, Magallanes Value Investors, the influence of liquidity and central banks on the stock markets, income tax returns, valued assets to zero on the balance sheet, management teams that steal from shareholders, bonds with negative returns, how to deal with declines in the stock markets, investing in physical gold, the Another reason middle of each stock market, buy stocks that have fallen, manage the size of portfolio positions, invest in pension plans, manage risk, invest in corporate bonds, invest in REITs or short squeezes.

We also talk about listed companies such as ENCE, Petra Diamonds, Apple, Berkshire Hathaway, Siemens, Dassault Aviation, Avis, Hertz, IAG, Anheuser-Busch InBev, Adriatic Metals, Novagold, Amazon, Facebook and sectors such as investing in silver.

Tabla de contenido

  • Contact Form.

    General doubts for May 2020

    On the effect of currencies on the portfolio

    Good afternoon, congratulations on the podcast. I have a question on a subject that I have never heard you discuss. It is about the effect of currency exchange variations on the portfolio / performance when you invest in a region with another currency (eg USA). Do you protect yourself against this effect? How? Could you explain your experience to us?

    PS: I understand that you could borrow the appropriate amount of dollars, transform them into euros and in this way your investment would be "neutral" to exchange rates, neglecting balances (which are not negligible).


    On how to protect yourself from inflation with cable companies

    They talked about how cable companies protect against inflation in the past office, could they develop the answer a little more


    On how to download the documents for the rent in Interactive Brokers

    In Interactive brokers, in which section you can download the document for the 2019 income statement (IRPF) since there is a lot of information, but not something that is very clear

    greetings and thank you very much for the program


    About Magallanes Value Investors

    My question: What do you think of Iván Martín's funds? I have your 3 products: European, Iberian and Microcaps. I think he is the best Spanish manager at the moment, and you don't give him much ball… Another question: have you thought about interviewing him?

    (Iván Muñoz)

    On the influence of liquidity and the federal reserve on stock markets

    Why does liquidity (or the Fed) move the market?

    (Lautaro Lacoste from Argentina)

    About filing the income tax return

    Hello, I am sending you a question for the stock market office: Do you make the income statement yourself or do you delegate everything to an agency? Greetings and congratulations on the podcast.


    On assets valued at zero on the balance sheet

    What happens when an asset reaches its useful life, its value being totally depreciated, but it still works well, for example, a building?

    (Alvaro de Toro Vela'zquez)

    About extractive management teams

    Is it possible for the majority shareholder of a company to withdraw and keep the profit from the company for that year, instead of distributing it in the form of dividends?

    (Alvaro de Toro Vela'zquez)

    On the reasons to invest in bonds with negative returns

    What is the reason for investing in negative bonds?

    (Alvaro de Toro Vela'zquez)

    On coping with falls

    Hello, Adrián and Paco. If today markets fall less and less, there is less temporary investment space (2008, 2014, end of 2018, 2020). And with it can be down for months and more ... Long-term investment would be cut constantly. Would it be better to move to shorter times?

    (Carlos López Faces)

    On investing in physical raw materials in financial markets

    If I buy some raw material, for example, gold, in a commodity market, can I go to the company from which I bought it and obtain it physically? That is, does investing in gold on a listed market give you the right to go to the gold company, stamp and say "I want my gold"?

    (Gabriel Vidal)

    On knowing the average PER of each bag

    Do you know of any page where you can get the per medium of each bag, as well as by sector?

    Thank you! And sorry if you've already mentioned it in a podcast, it's not easy to catch up with 122 podcasts;)


    About buying stocks because they have fallen

    Good morning Paco, I am following your courses carefully, I already have one module left to finish the free session. The truth is that I did not know much about this world (it seemed totally impossible to start in it ...) and now I follow the news about companies and current affairs on the stock market on a daily basis (I am subscribed to Expansión & Empleo).

    I review the history of how the share price is in some companies that have been greatly affected by the crisis (for example Bankia, Sabadel, Acelormital, Santander ...) and right now it is below half its maximum in 2019 ( There is an option in Expansión to review the history that is phenomenal), with all this and long-term views (I don't want to get rich), even thinking about one or two years, do you think it is a good reference to buy shares in these companies and wait for it to reposition itself at its previous price or value? I follow the news, but at the moment they are not very positive in these companies, although I suppose they are large, their price is very cheap and the profitability can be good unless a disaster occurs…. haha! I don't know if you can tell me if the approach is correct or if I have to take into account other variables that are also important.

    (David Alfonso)

    On how to manage the size of positions

    I have the following question with GOOGL and FB:

    I have my position on FB at 149.05 and on GOOGL at 1055.74. The problem is that I decided to enter with 25% of my budget for each investment (following the advice of Guy Spier and Peter Lynch to make 4 entries in the rally down) and but the decline never continued lol…. How do you do to add your position, wait for months for the price to drop from your average price or take advantage of any 10% pullback to add your position?

    (Pedro Zeballos from Santa Cruz, Bolivia)

    About investing in pension plans

    Hello good, I am starting with the free course to start a little in this world and above all to expand my knowledge since lately I have been very interested in it although the truth is that we are not having a good time. I just wanted to ask a question:

    About 4 years ago my bank manager, who had been behind me for a long time, offered me a pension plan that painted me quite well since it deducts me together with my mortgage, he even gave me a number and focused exclusively on that (the statement of income). I did not have much idea to say nothing and in the end I signed up for this plan, Kutxabank mixed fixed income 30. I have not invested a lot of money, about 4.000 euros, but my question is, (after having informed myself a little more thoroughly about the plan and see what currently as many people are losing with these plans)

    If it would be convenient to continue investing in the long term every year and reinvest the relief, or stop doing it and think about investing in other things?

    For more information, my gross annual salary is around € 25/26 thousand and I have a mortgage which also deducts me.

    (Rafel Zamorano)

    About risk management

    It's about risk management. Do you use any specific indicator / parameter to calculate the margin of safety between the intrinsic value that you have calculated of the company and its price? I have in mind Graham's formula, Net net working capital, but I don't know if it would be correct to use it today, in what sectors, or if there is something better to compare both values.

    (Dani Heras)

    About investing in corporate bonds

    What materials do you recommend to start investing in corporate bonds? I did not find books on the subject. Some value investor program that invests in corporate bonds would be very good. thank you

    (Hugo from Argentina)

    About making monthly contributions to funds

    Hello value masters, I have been following you for a year and you have made me learn a lot about this world, thank you for sharing your knowledge and making this world of value something easier. I have a question that I have been thinking about for some time, about 9 months ago I started investing some savings in the true value fund, I had already come from investing in a fund with the bank and I left because I realized that I was not going nowhere, the fact is that as a result of the podcast I started to investigate and discovered new funds, so I diversified a bit and now I have two, true value and Andromeda. Now if hehe the question is, what do you think of making a monthly contribution? Or perhaps it is better to save and be attentive for when it falls, as has happened now, invest and on the contrary when valuations are rising rapidly, take out a small part in case there is a recession. That is to say, always have 20% or 30% in the reserve for moments like the current one and contribute little by little until the valuations recover and when they are high, gradually withdraw up to 20% or 30%. Forgive me for the testament haha ​​and congratulations on the new member of the Paco family.

    (Jota De Dolly)

    About investing in REITs

    Good afternoon, I was wondering your opinion regarding REITs, not only in Spain, but in other countries with more legal security


    On the consequences of an intervention in Spain

    Congratulations on your parenthood and on the podcast in general! A question for an upcoming program. In the event of intervention by Spain, what sectors do you think would be most affected in the short term in the national market? Virtual hugs

    (Peter Parker)

    About the short squeeze

    Could you explain what the short squeeze consists of? I have read several definitions and examples, but I can't quite understand it.


    Doubts about companies and sectors May 2020

    About ENCE

    Hi Cracks!

    I am sending you a question for the next ENCE office. I've been thinking and I think that the consumption of cellulose will probably end up rebounding thanks to tissue, in addition to coming from very depressed prices. I've been looking at ENCE and poof… I don't know what to think since the debt and the mess at the Pontevedra factory pull me back. How do you see it as Galician “insiders”?


    About investing in silver

    Congratulations on the podcast; a great luxury to have you every week.

    One consultation for both; Now that gold is at highs for a long time, and that miners are flying in the stock market, how do you see the opportunity to invest in silver, which seems to be a significant divergence?

    Í Lo haríais a través de mineras? Si es asíí, ¿What are the most interesting considerations?

    (Roberto Álvarez)

    About Petra Diamonds

    I'd like to know your opinion about Petra Diamonds.


    About Apple and Berkshire

    I'm starting to listen to you and you have me hooking, congratulations on the podcast.

    I have a doubt when making the valuation by multiples of the EV / EBIT, P / FCF and EV / FCF of a company. I give you two examples for you to comment on (the data is extracted from Gurufocus)

    Empress EV / EBIT P / FCF EV / FCF

    APPLE           19            20          20

    BRK.A 30 19 20

    Now, in the case of AAPL it suits me more, since it is an exceptional business and it seems reasonable to pay 19x EV / EBIT, 20x P / FCF and 20x EV / FCF, the 3 ratios are within "normality" for that quality of business. Don't you think

    In the case of Berkshire, which I consider to be a good to very good business, the multiples of P / FCF and EV / FCF add up to me, but in EV / EBIT it is completely off the map. What is this about? What ratio should we look at? I suppose the answer is it depends, but I would like you to comment on some cases of companies that match one multiple and another does not, and which one you usually focus on more.

    Thank you very much! Greetings to the great Digging Lord!

    (Miguel Ángel Jiménez from Granada)

    About Berkshire Hathaway

    In the current situation and after the doubts about Warren Buffet and Berkshire Hathaway with the sale of airlines and banks ...

    How do you see investing in Berkshire at the moment? Better to wait for him to start making a move?

    Do you think there will be a facelift for Berkshire after recent moves such as buying Apple and Amazon stocks?

    (Lucas Bellido)

    About Siemens, SAGE and Dassault Aviation

    First of all, Congratulations on your podcast. It was recommended to me by a friend a few months ago and I am already a faithful listener.

    I wanted to ask you about a security that I have in my portfolio for a long time that has been behaving very well, such as Siemens Healthineers, to see what you think, and in line with this, what do you think of the future Siemens Energy, whether it will generate shareholder value or not , although it is true that there is little information about this new spin-off.

    Another of my questions, is motivated by listening to Kike Vázquez talk about SAP, and I think that on the subject of cloud SAGE $ SGE is well positioned. Do you see Sage as a good option?

    Already the last one, facing the recovery of aviation, and hand in hand, the Aeronautical Industry, my favorite is Dassault Aviation $ AM What do you think of it, and of the sector in the coming months?


    About AVIS, Hertz and IAG

    Congratulations on the program, thanks for your advice. What do you think of companies like Avis and Hertz that are generating a lot of debt and little liquidity by having the entire fleet of vehicles stopped (Hertz more than Avis), the shares have dropped a lot, the same thing happens with IAG due to all the air restrictions in this moment. Do you think it is a good time to invest due to prices or do you see too much risk? How would you evaluate the risk vs. possible profitability in these 3 companies (Avis, Hertz, IAG).

    (Juan Carlos Cando)

    About Anheuser-Busch InBev

    What do you think of Anheuser-Busch InBev NV? 39, 06 € with accumulated fall from highs of 56%.

    (Juan Carlos Carrera Ruiz)

    About Adriatic Metals

    Is there an estimated date for the submission of the Adriatic Metals PFS? Greetings my Galicians of value


    Good afternoon, could you comment on the acquisition that Adriatic Metals has made and how it affects your investment thesis. Regards.

    (Lidia from Segovia)

    About Novagold

    1) I wanted to know if you have an opinion on Novagold (at current price); I have listened to an audio from Amiral in which they speak highly of it, as a company with an exceptional asset and with well-known shareholders.

    2) The second is about what resources do you recommend to train specifically to analyze investments in mines. I mean podcasts, blogs, books, Twitter accounts, etc.

    Thank you very much for everything.

    (Roberto Álvarez)

    About Amazon

    Ask for both of you with an Amazon at Per 90 how you see it to enter, I know that it is very expensive but do you see any case in which it can go down?

    (Kike Mullor)

    About Facebook

    First, congratulations on the family growth! And then your opinion on FB, since it seems that there are certain quarrels and envies between the matrix and Instagram precisely as a result of the success of this. Is it possible that Zuckerberg is trying to clip his wings over a question of ego between the directions?… Is it possible that the increase in use (and expenses) is not accompanied by the benefits to the same extent?

    (Ralf Sparrow)