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Category: gestion financiera

Mátrix and the green shoots.

Some will say that the recovery of the Spanish economy is a fact, and that to say the opposite is to be prophetic, unpatriotic or worse. Moreover, the markets momentarily endorse the solvency of the Spanish economy. Yes, those same schizophrenic, inefficient and bipolar markets that good investors know how to take advantage of in the long term. And the fact is that the Mátrix in which we live is pricing assets such as Spanish debt at the prices of when Cayenne Porsches and Audis flooded Spanish cities, in the days when there was plenty of work and credit, and a shortage of workers. The news is nothing less than that the Spanish 10-year bond is trading at a paltry 3.39%, breaking records from 2006! (more…)

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From Russia with (more) Courage.

13 months ago we wrote a article in which we told you about the enormous value that existed in the Russian stock market.. In it we cited some companies that were trading at extraordinarily low earnings multiples, whose businesses were very stable and therefore had a dizzying potential for revaluation. Well, the geopolitical circumstances, i.e. the botched EU/US attempt to foment a pro-European revolution in a Ukraine at least half of which is pro-Russian, have caused the semi-war conflict to affect Moscow's stock market with sharp falls, adding even more value to some of its companies.

We should not lose sight of the fact that the conflict does not directly affect Russian territory or its economy. Or at least not as much as it does the EU itself, which is as recklessly dependent on Russian oil and gas supplies as a diver is on his oxygen tank. You will get a clearer idea of what I mean by looking at the graph at the end of this article. this Gurusblog article.

It is clear, then, that it is not Russia that has the most to lose in this conflict, but the EU. And yet the Western (US-EU) strategy, in its eagerness to incorporate Ukraine into NATO and thus advance the allied military border to the very line between Ukraine and Russia, has upset the fragile balance of the government in Kiev. A once pro-Russian government, but governing a single state, and now non-existent, unrecognised by the east and southeast (Russian-speaking) and financially bankrupt. Thus the secession of Ukraine into two antagonistic camps, pro-Russian and pro-Western, seems unstoppable. (more…)

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It is not a quarter or a year. It is an entire Investment Life.

Investment gurus such as Warren Buffett have it ingrained in their very DNA: Investing is like playing any sport whilst focusing on the game itself, whereas doing so whilst focusing on the score is pure speculation. The matches, the championships and the well-deserved glory go to those who focus on the pitch – on constantly improving their strategy and competitive skills when selecting companies in which to invest – rather than on the absurd speculation of managing a digit displayed on a neon sign, which, incidentally, is as volatile as our own incompetence.

Buffet – like the rest of the world’s top multimillionaire investment gurus – never tires of repeating this over and over again, in every possible way, as in his latest annual letter, where he also discusses the few property investments he has made throughout his life. Well, few, that is, if we do not take into account that every investor, when buying shares in a company, is at the same time acquiring a proportionate share of the property assets that the company owns, of course. (more…)

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Beware of Developed Markets

The party continues. Following the rallies on the American and European stock markets – particularly the Spanish one – it seems that most investors are set to stumble over the same old stumbling block once again. When? It’s impossible to say for certain, but what is certain is that the stumbling block is there and investors, giddy from such a rally, are running about like headless chickens. And what is this stumbling block that so many are set to trip over? Well, logically, it’s the valuations in developed stock markets, which are by no means cheap any longer – not to mention that they’re already starting to look expensive. Especially when we bear in mind that corporate profits are at record highs and interest rates at record lows, which inevitably brings us closer to the end of this cycle and the start of the next.

We must also distinguish between the developed European and American stock markets: the European market is facing persistent deflation, which may well continue if the ECB is forced to take extraordinary measures similar to those taken by the Fed in recent quarters. But with the spectre of solvency crises and recession looming over the periphery, this will not bode well for its stock markets. It is true that the German stock market is trading at more reasonable prices than the Spanish one, but despite its efforts to shield itself, we must not forget that we are still all in the same boat – Central Europeans, Northern Europeans and the southern periphery. And that could be a source of contagion for turmoil on European stock markets, although, logically, those in the south will bear the brunt of it, as they are at the epicentre of the financial problems and are therefore trading at levels equivalent to almost 20 years’ worth of profits. (more…)

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A one-off wealth levy.

It has been almost a year since we had already warned that the council of German experts advising Chancellor Merkel recommended that the leaders of southern Europe confiscate a portion of the value of property from owners in the EU’s periphery in order to prevent the collapse of the peripheral financial system. At that time, this body – known as the «five wise men» – argued that whenever a bailout of banks or southern European states was necessary, it should be carried out internally (a «bail-in»), that is, using money from the citizens themselves living in the countries in distress. And that confiscating a proportion of the value of property was the easiest, most practical and simplest way to obtain the money needed to prevent the collapse of peripheral states and the financial system. This was because doing it the Cypriot way – by confiscating a portion of bank accounts – caused greater public alarm, and it was also easier for ‘the targets’ to avoid confiscation by transferring the money out of the country (as the better-advised Cypriots did). Property, on the other hand, is tied up; it cannot be transferred overnight to Luxembourg, Switzerland or Germany, and at the same time it is viewed more favourably to steal to confiscate property from property owners – who are presumed to have greater wealth – rather than from savers or investors who live in rented accommodation. (more…)

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Resolving the dilemma of whether or not to go against the market.

«If there’s one thing I’ve learnt over the years, it’s that you shouldn’t go against the market«That is the blunt remark made a few days ago by a senior executive at a national bank to one of our clients. In fact, it is a phrase we have heard on many other occasions from various bank employees, and even from some savers, over the nearly three decades that we have been investing our money and that of our clients.

The question we are going to try to settle once and for all is whether it is true that, in the long run, we must stand up to Mr Market, or whether, on the contrary, we should let our investments ride out the ups and downs of the markets. And the answer may come as a surprise to more than a few: It depends on whether we are bankers or investors. Let us explain. (more…)

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If you win the Christmas Lottery jackpot…

We are living in times when millions of people dream of the possibility that the Christmas Lottery will make them rich. The common belief is that once this miracle has happened, their problems will disappear forever, and happiness will be the norm for the rest of their lives. But everything will depend on the attitude and decisions of the winners from the moment the Children of San Ildefonso call out their numbers. It is not so much about the amount of money the prize represents, but rather the way in which they decide to manage that sudden wealth.

It is now five years since we published an article entitled «Jurassic Park«, also at this time of year, that «the coexistence of a limited capacity to generate wealth and a sudden fortune will, in almost all cases, be an unnatural union that will seek to restore its balance». In other words, the union of a windfall of money with people who have not been able to generate it through their own efforts tends, unfortunately, to last only a few years.

(more…)

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Financial Repression: A lifeline for debtors and a death sentence for investors.

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Many people will already be familiar with the term ‘financial repression’, but for most it will still be something unfamiliar – just another technical term in these times when we have learnt to talk quite naturally about subprime mortgages, deleveraging, the ‘new normal’ or the now overused term ‘stagflation’. The scenario in which we find ourselves – and in which we will continue to operate over the coming years – is one of ‘financial repression’. And this has been agreed upon by those who once dominated the economy but are now desperately trying not to drown in their own vomit – that is to say, their almost infinite debt: Europe, the USA and Japan. (more…)

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La Caixa's pressures on its customers: shall we talk?

Today we’re bringing you a real-life case that has recently come to our attention, and which we wish to publicly denounce here. It is an example of the pressure that bank staff in general – and this branch manager at La Caixa in particular – exert on their customers in order to keep them with the bank at all costs. As you will see in this email sent by the director to her client, she uses scare tactics and manipulation to convince the investor that they are doing something completely mad, and in the process discredit none other than Bestinver’s pension schemes… Her email is probably the best example of the bank’s aggressive and unethical sales tactics. And this manager’s superiors would surely have no hesitation in congratulating her on her (dubious) sales tactics, designed to bolster the bank’s ailing balance sheets. This is no exception; unfortunately, this is how our banks operate, prioritising their commercial interests over the most basic ethical behaviour towards their customers, to whom – let us not forget – they are presumably accountable and to whom they are supposed to provide advice. (more…)

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Spain, recovery or lies?

We cannot ignore articles such as the one just published by Roberto Centeno in ElConfidencial.com, Neither for its forcefulness nor for its coincidence with many of the arguments that we have been giving since Cluster Family Office. Before going into the details, it is worth remembering that Centeno was CEO of companies such as Butano, Enagas, Campsa and is currently Chairman of Eneroil. He also holds a PhD in Economics from the Complutense University of Madrid and is Professor of Economics at the School of Mining Engineering of the UPM.

Although we have linked to the original article at the top of this post, we will summarise some of the arguments here. Be prepared for the traumatic shock of a few slaps of reality, such as we have been warning constantly, again and again. But as in the Matrix movie, most prefer to take the blue pill of the declarations and versions of the virtual reality of recovery, which governments try to hammer into our heads. However, we are already we recommended you to take the red pill 5 years ago. How time flies....: (more…)

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(+34) 93 626 47 75

Torres Sarrià, Carrer de Can Ràbia, 3-5, 4ª Planta BCN 08017

(+34) 91 794 19 82

Pº de la Castellana, 93 2nd floor MADRID 28046

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