Investing for the Long Term

Thoughts and Reflections of One of the Most Influential Fund Managers in the World

Known as the "Spanish Warren Buffett," Francisco García Paramés is one of the most respected investors in the world. As Bestinver′s CIO, his clients obtained in Spanish equities an average annual return of almost 16% from 1990 to 2014, compared to 7.8% obtained by the General Index of the Madrid Stock Exchange. The returns achieved in global equities against its relevant benchmarks were similar.

In this book, he tells us about his origins: his years as a student at the Complutense University of Madrid and the IESE in Barcelona when he was getting his MBA. There, he discovered his analytical skills, which together with his patient nature perfectly suited the requirements of value investing. A long–term investment school that he has never abandoned and that gave excellent results during the following two–and–a–half decades.

In addition to his personal and professional experience, García Paramés explains the key elements of his investment process. First, he establishes the appropriate economic reference framework, in his case, the Austrian school. He comments on the authors who have influenced him the most. He talks about the differences between real assets and monetary assets, as well as passive, semi–active and active investment. He also explains what type of companies to look for and where to find them, while illustrating the ultimate source of opportunities: our emotions.

This book is a must–read for any self–respecting investor and for anyone interested in knowing how the investment markets work.

Introduction

Part One: The Backstory

Chapter 1: A Bit About My Early Years

Chapter 2: Going Solo (1991 2002)

Chapter 3: Investing as a Team (2003 2014)

Part Two: Theory: The Underpinnings of Investment

Chapter 4: The Austrian School of Economics

Chapter 5: Investment

Chapter 6: Passive and/or Active Management

Chapter 7: Investing in Stocks (I): Foundations and Principles

Chapter 8: Investing in Stocks (II): The Opportunity. Valuation. Management

Chapter 9: The Irrational Investor Lurking Within Us All

Conclusions and Future

Appendices

I: 26 Small Ideas and One Guiding Principle

II: Reading Material and Wealth Creation

References

Further Reading

FRANCISCO GARCÍA PARAMÉS is founder of Madrid–based Cobas Asset Management. Considered one of the leading value investors in Europe, his unique style of investing has returned exceptional results and earned him global notoriety. While an investment manager at Bestinver, his star rose to international acclaim as he gained a reputation as Spain′s top fund manager by drawing 16 percent annually from markets for two decades. He′s a self–taught investor who developed his own brand of asset management by combining the sensibilities of the Austrian business cycle theory with the principles of value investing, as practiced by such luminaries as Benjamin Graham, Warren Buffett and Peter Lynch.