Spanish Warren Buffett Speakes At ESADE Business School
A while back Value Investor Insight profiled Francisco Parames, dubbed the Spanish Warren Buffett. A friend of mine managed to send me a transcript of Paremes’ latest talk.
Click Here To Read: Spanish Warren Buffett Speakes At ESADE Business School
H/T Ariel
Francisco Parames (Bio Via ESADE)
Deputy Chairman of the ESADE Alumni Finances Club, was responsible for welcoming the audience and presenting García Paramés’ career in investment management. He graduated in Economics from the Universidad Complutense and got a Master’s from IESE. As for his professional life, the numbers speak for themselves. After 20 years in portfolio and fund management with Bestinver, the profitability of his Spanish equity funds reached 21% per annum for the period 1993-2007, equivalent to an accumulated increase of 1,786%, compared to the 646% obtained by the reference index (IGBM – the Madrid Stock Exchange General Index). He also became Manager at Bestinver Internacional from 1997, where his accumulated yield from 1998 to 2007 was 212%, compared to 29% obtained by the reference index (the MSCI World index).
This outstanding self-taught Manager, with a management style based on strict application of value management, structured his talk around three areas: equities compared to other investments, market efficiency and fundamental investment. This meant that those present were able to compare the cornerstones and the reasoning of his management method.
Speech Excerpt (Via Esade)
He went on to explain Bestinver’s general framework for action, following the principals of the Austrian School of Economics. This teaches that the market works, but as a process it never balances. What is more, “it supports the Gold Standard, and without it there comes financial instability and frequent over-expansive and recessive cycles, resulting from Governments manipulating the interest rate level”, he explained. “The current problems have come about because of manipulation of the interest rates by the USA and Europe”, he said. García Paramés believes that if these distortions did not exist, the Austrian School would not be very useful.“We try to find undervalued values… the next stage is to find companies; we buy good companies with good teams behind them, good shareholders and a good price”. An understandable business with competitive advantage, which continuously gets market share and has a good management team … these are a few of the characteristics that the Bestinver executive considered when he made his choice. “At the end of the day, 90% of the companies we invest in are family businesses, which are often undervalued; the market penalises them and we reward them”, as he put it. As an example, he focused on one of the companies that Bestinver is currently investing in: Schindler. García Paramés explained: “This is the kind of company we like. It’s our third biggest investment”. A stable family company, number two in the lift sector, in a market where there are only seven companies.
Click Here To Read: Spanish Warren Buffett Speakes At ESADE Business School
