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The cheese They took it away a long time ago. Today’s turbulent world is constantly shaking things up, and we’ve got used to being proactive, to creating our own good luck, in short, to improve the way we fight for a life that nobody usually hands to us on a plate beyond our conception, gestation and childhood. The preparation that for some would still be an unattainable ‘upgrade’ or the coveted benchmark has, in our times, become a vital minimum requirement for defending ourselves in this jungle of consumerism, taxes, competitiveness and an endless array of stimuli that are extremely dangerous to the integrity and growth of our wealth. No one now enjoys permanent, secure and easily accessible wealth. For most, wealth is as elusive and volatile as ever. And everyone—at least those who wish to rise above mediocrity—must compete in a world where we find people on a thousand-euro-a-month wage with a level of education that would be the envy of any well-off person from a few decades ago. This is a reality that only those lulled into complacency by a cloak of inherited and/or dwindling wealth, or the incompetent, can ignore.

Fortunately, more and more people are turning to independent counselling, which is, of course, a far cry from the role of an adviser or manager at a financial institution. Those with substantial wealth seek guidance (rather than management) from multi-family offices ad hoc, that’s our core business. But when we consider our work and passion beyond corporate growth, when we focus more on the journey than on the destination, we realise that the work we do for large fortunes can be adapted to most medium-sized portfolios. The only difference is that the applicable cost must be much lower, and therefore it ceases to be profitable for most multi-family offices. Is that reason enough to turn away small and medium-sized investors? Only if we focus exclusively on the profitability of our business. But what’s more, through some small-scale philanthropic or low-cost advisory work, we have received an enquiry from a larger client who does meet our financial expectations. That is one of the great things about enjoying the journey: it takes us straight to the destination without us even realising it.

But recently – in the last few years or even months – some people are realising that things are taking a turn for the worse for many. It is no longer just the cheese that is moving; our compasses are shifting too. It seems we are entering an era where not only will all the virtues of proactivity and constant self-improvement be necessary, but we are also being forced to find our bearings in a global political and economic landscape for which the navigational methods that previously helped us find our way are no longer adequate. Could we say that it is harder to make economic progress today than it was a few years ago? As a Family Office, continuing with the proactivity and the creation of good fortune that we have already made part of our routine, we prefer to think that opportunities are opening up today that we have never encountered before. We are perhaps facing a black swan which we should appreciate in all its splendour and uniqueness, rather than lamenting our misfortune.

Before setting off in search of new cheeses, we must nowadays set off in search of new compasses. And when we find them, they will lead us – though not without effort – to new, unknown and delicious cheeses lost in a exciting a new maze. Essentially, this change of scene is nothing more than yet another shift in the location of traditional cheese. In other words, just as we had grown accustomed to discovering new cheeses through effort and adapting to change, another change has come about. But this time, it is not the location of the cheese that has changed, but rather the our own search interface. Our current ones will no longer be of any use to us old trainers not only our passion for sport and our enthusiasm for setting out in search of new cheeses, but we must go further still to keep making progress. Is it harder now than it used to be? Only time will tell whether we have found it more or less difficult. I’d say it’s certainly more exciting, so what we must do is enjoy this journey we’ve been given the chance to experience more than ever before.

Through philanthropic counselling, we have observed how, amongst smaller investors, the search for a compass and for ‘cheese’ has become particularly arduous in this day and age. Those with modest wealth – ordinary savers – do not have access to investments structured and designed for small amounts. From our position, we try to tailor these investments to this client profile, but we do not always succeed. Some interesting investment opportunities elude the small investor who has only 25 or 50 thousand euros at their disposal. On the other hand, no one has a crystal ball to guarantee the absence of errors in the event of a crisis in the economic system, not even the Family Office/high-net-worth client partnership. But there is no doubt that sound advice helps to minimise risks and find the path to the compass that will enable us not only to find our way back through the cheese maze, but also to plan our wealth for the long term in the best possible way: without neglecting the enjoyment of the journey, whilst at the same time growing our wealth.

Who’s taken my compass? It’ll surely be easier to find it if someone shows us the way, and once we’ve done that, the search for new cheese will feel like a familiar old path.

Bloomberg TV, Wednesday 23 January 2008, Gonzalo Rengifo, Managing Director of Pictet & Cie. in Spain, Portugal and Latin America:

«At the moment, investors in the stock market should be cautious, but that does not mean they should stop being active, as there are numerous very attractive investment opportunities they should take advantage of.».

A. Redondo and J. Zuloaga, Expansion Sunday 27 January 2008, A guide to weathering the stock market storm:

«After several years of enjoying a Mediterranean climate, global stock markets are currently facing a veritable storm. The clearest example of this shift is reflected in the last trading week, when the subprime crisis and fears of a US recession triggered the biggest rises and falls in the Ibex’s history within just three days. Many investors have been shipwrecked by the new storms on the trading floor. Probably because they were unaware of the lifeline offered by derivative products.» (…) «But, as well as sheltering from the storm, investors can also capitalise on it. To this end, one option is to opt for trading in futures.» (…) «In addition to these products, financial institutions are turning to new tools such as contracts for difference (CFDs), which have been hugely successful in the UK, or certificates, which have proved a hit in markets such as Germany and Italy.» (…) «Meanwhile, certificates also broaden the range of possibilities, although their tax treatment makes them difficult to market. However, some institutions, such as UBS, Deutsche Bank and, to a lesser extent, Société Générale, have decided to take their first steps into a product that is listed on the stock exchange and is structured around one or more indices, a basket of shares or a sector, allowing investors to bet on falling prices, with the aim of multiplying gains or reducing losses. They are ideal for non-directional markets, says Miguel Muñoz of X-Markets, Deutsche Bank’s certificates division.»

Bitchbag, Saturday 26 January 2008, comment on our article Coitus interruptus:

«We’ll see how this all turns out, because at the moment both sides are being torn apart – the bulls and the bears at the same time. The only ones coming out unscathed for now are those watching the bullfight from the sidelines.»

Cretan, Wednesday 23 January 2008, in his article Trichet is standing firm, and the market is paying the price:

«The market remains so turbulent that the best thing to do is to stay on the sidelines and hope that negative news doesn’t keep piling up. I won’t tire (for the time being) of continuing to recommend the same thing: a great deal of caution, and the further away from the markets, the better.»

JMDV, Thursday 24 January 2008, in his article Jauja again:

«What I’m trying to do is call for caution and remind you that all the doubts that existed on Monday (for those who actually believed them) still hold true today, Thursday. Nothing has changed except Mr Market’s mood. Let us therefore take this opportunity to fill our portfolios with good companies at good prices…» (…) «Remember that the aim of any investor (whether technical, fundamental, long-term or short-term) is to grow their wealth over the years. If we fill our portfolios with high-risk shares, blinded by buying frenzy, we run the risk of never achieving our goals.»

In this very post by JMDV, we find comments – a gem like this one from The Omega Man (one of my favourite commenters; sorry, but I don’t know where to link to you):

«Pasta and fundamentalisms:’
Value investors (myself included, at least) aren’t value investors for aesthetic, philosophical or religious reasons. We are value investors because we want to make as much money as possible, and we have at least 5–10 years to reap the rewards. And if you spend enough time reading about the When looking at this topic – which investors have achieved the highest annual returns, and so on – you quickly realise that the most effective way to do so is through value investing. The fact is, if you’re not in a hurry, making money on the stock market is incredibly simple: 1. Calculate the intrinsic value, as conservatively as possible, of a number of companies (and JM explains this to us every now and then) (how to do it). 2. Buy, when they come within reach, at prices well below that intrinsic value (50-40%). 3. Sell when the share price approaches its intrinsic value. And that’s that. There’s nothing else to do. Are prices falling? Well, buy more if you’ve got the money, and if not, just be patient and stay calm. Can’t find any? Companies to buy? Well, just keep your cash reserves up and carry on looking. Anything other than those three points above is just noise, and the mind playing tricks on us by looking for patterns in »the turmoil on the stock market."

We could give many other examples, but we think these will be enough to give you food for thought:

In the first instalment, we have comments from Gonzalo Rengifo (Managing Director, Pictet Spain, Portugal and Latin America), and the article in *Expansión* features contributions from Miguel Muñoz (Deutsche Bank’s certificates division), Miriam Pérez-Camino (Head of Listed Products at BNP) and Francisco López (derivatives expert at Gaesco Bolsa), amongst others. They are nothing more than Financos are on the hunt for Inversópatas. (We warned about this back in June 2007, but they’re still as ravenous as ever)

In addition, we have included Putabolsa, Kretan, JMDV and The Omega Man in a second group. I think we would all agree that this selection has a great deal of quality (I should point out that, technically speaking, I consider these bloggers to be at least as knowledgeable as the leading ones) whilst diversity. It is clear that within this second group we might find radically different views on investing in the markets; however, given the current situation, their views converge on many points, diverging significantly from the talking points put forward in commentaries by Bloomberg and Expansión.

What differences are there between these first two examples and the rest of the bloggers and authors whom we find much more relatable and admirable? Independence. Indeed, none of our dear colleagues and neighbours has any ulterior motive beyond offering honest advice out of a purely educational or philanthropic desire. Whereas all those quoted in Bloomberg and Expansión spout a line on which the revenues of the companies paying their salaries depend, and which will potentially enable them, over time, to climb the corporate ladder. That is all there is to it. It is not a question of some being clever and others foolish (there may be a few, but I doubt they are in the latter group), nor is it that their view of the markets and risk is incomplete or distorted. I repeat, the essential difference is Independence.

If we extend this phenomenon to other areas of wealth management – and not just to the markets – we will gain a better understanding of what counselling entails. If we also apply the quintessence of the networking With counselling, we will be very close to what a multi-family office is. The The cost of this independence will be more than offset by the savings on fees and the avoidance of unnecessary risks, not to mention the potential losses from unsuccessful investments.

My respect and admiration for the second group mentioned, and my deepest contempt for the first. For at times such as these, I hold them particularly responsible for the catastrophic damage caused – and likely to be caused – to the assets of investors who are unaware of the grave dangers posed by the «lifelines» offered to them by their derivative products. Proposing investments to clients who lack the necessary knowledge to understand or accept the risks involved is not only unethical. Even though their clients’ operating accounts meet the targets set, and unfortunately their superiors reward them for this, even in times of prosperity, it is negligible.

How much longer will the average investor continue to place blind trust in expert analysts on the payroll of companies selling financial products? It’s not that difficult to work out Who’s Who in the City if we look at the economic independence of their slogans.

It is still unclear whether what was supposed to be a complete overhaul of the market, a clean slate, a fresh start or, as the experts A «healthy, strong and widespread correction of the excesses of recent months» may be cut short. Perhaps we are looking at staggered declines, and over the coming weeks we will see a somewhat atypical and erratic sell-off – but a sell-off nonetheless.

But it is also possible that we will see a period of extreme volatility with a very limited downward correction. We might even see a false ‘clean-up’ scenario, built on shaky foundations, that underpins a new and spectacular bull run in global markets in the short to medium term. In either of these latter two cases, the foundations for a new bubble-like structure with highly dubious foundations could be recklessly laid.

It’s not that we’re hoping for a sudden, devastating crash that would mercilessly punish investors, but if the sell-off doesn’t go any further than we’ve seen so far, we’ll be left with a strange feeling. Something like a coitus interruptus. As the JMDV, Master of Risk, If confidence does not return after the slowdown, when the economic expansion is due to begin, but instead returns earlier, halfway through, a bad situation.

The macroeconomic fundamentals being discussed in Davos are beginning to move away from euphemisms and call a spade a spade. And this stands in even sharper contrast to the spectacular market rallies (particularly in Europe) that we are seeing this week. But in a climate of confusion such as the current one, we believe that the slump that began on last Monday’s ‘Black Monday’ was a way of fitting together many pieces of the economic jigsaw puzzle we have been grappling with for many months. To the new world order which we do not yet understand, and which is why We find it chaotic, it would be in his best interests to start from a stock market scenario lacking momentum, such as the TriNa. An aerophagic world, with oil at 100 $ and fundamentalist nuclear terrorism, amongst many other recent evils, has very little tolerance for bubbles.

That is why what might at first glance be seen as a positive – that is, preventing a further fall in the markets and minimising what began as the storm perfect, leaves us with a strange sense of unease. Although it might seem typical of a character from a novel by Sacher-Masoch, this sudden halt to the falls leaves us with the unpleasant feeling that coitus interruptus. I know that those affected by the recent stock market falls – that is to say, almost everyone in the West – may not understand these arguments and may even take offence. But this is by no means a mockery of other people’s misfortune; I myself am suffering the effects of the falls in Chinese or US equities, for example. Furthermore, almost all our clients have been negatively affected to a greater or lesser extent. That is not the point. The point is that the depth of this misnamed ‘crash’ does not seem sufficient, and the timing Nor are the repercussions of this allowing for prudent restructuring.

As always, time will tell. Perhaps we will eventually see the falls deepen, or perhaps we are looking at a platform from which new rallies will take hold, which time will prove to be solid. But our feeling, I wouldn’t even call it an opinion; it’s just that we should suffer more in order to sufficiently atone for the lustful excesses of our recent past.

«Those who love you best will make you cry.» I would never have thought that could apply to the stock market.

Come and see: Here you will find a world of thrills and spills. With wild beasts that will make you shudder with their roars and claws, illusionists that will leave you speechless with magical tricks, tightrope walkers and contortionists with inhuman postures, window dressers who will free themselves from impossible traps and, of course, clowns who will make us laugh out loud.

Only a few sessions. Cannot be extended.

After enjoying the show (some children are terrified of it), let's talk about the economy. On the reflections that are taking place and the conclusions that analysts will reach in the next few days in the Forum for Davos.

This year's forum is more timely than ever and aims to «improving the state of the world«. The Swiss professor Klaus Schwab was the forerunner of these meetings, which originally discussed business strategies, and has become the true World Economic Forum.

Some very interesting ideas have been contrasted among its attendees, here are some examples:

The mission of the EDFIntervention and rate policy decisions are not intended to save the markets from an economic downturn. Crack, but to save the economy. Many people often confuse one thing with the other. It is like not distinguishing sex from love, although they are related, we all know that it is very dangerous to confuse them.

Another very interesting reflection that is being discussed at Davos is the real recession (rather than technical) that the economy in general seems to already be in. The big unknown is how deep it is and how many countries will be affected. Once the intensity and scope of the crisis has been determined, it will be time to worry about how long it will last, but that will come later.

The EDF, The Federal Reserve, as we have seen, is taking the emergency measures that the instruction manual of the economy requires: significant rate cuts, while at the same time helping the hardest hit sectors with economic and fiscal measures, in addition to those that we will see in the near future. The Federal Reserve has rolled up its sleeves and is bailing water while activating the emergency protocol.

Europe's neighbouring ship is watching from a distance. Far from checking the safety of its own ship and fearing the waves that would be caused by the sinking of the American liner, it continues to proclaim that it will not tolerate inflation and threatens rate hikes. It is not only Trichet but also the rest of the European leaders, deny the recession. As if denial itself were enough to bail out the water. They deny the real estate affectation having in their cellars bubbles like the Spanish and the Irish. The ECB will soon have to resort to the emergency instruction manual. recessive, But it seems clear that he will do so late and badly. It does not yet seem ready to roll up your sleeves as the EDF, But water is not reduced by talking, it is reduced by acting.

Davos is so timely that perhaps it will open your eyes European authorities to stop thinking about the stock market circus and focus on the real problems of the global economy. If they don't, the circus will leave the big top and take to the streets of the city. And the contortionists, tightrope walkers, illusionists, wild beasts and clowns will cease to be a spectacle and become a nightmare. surreal.

Come and see, but we will always have the following Davos.

Although this article is dated Tuesday 22 January 2008, I can assure you that we wrote it over the weekend. In fact, it has been sitting in the «drafts» folder for three days now, and I imagine the Rankia administrators can confirm this. Following the events of this Black Monday (or perhaps Grey Monday, depending on how Tuesday and Wednesday turn out…), we considered updating it. But we believe it is far more revealing to publish it exactly as it was written, with its original photos included. Exactly as it has been sitting in the «drafts» folder for three days. So here it is, without any changes, the post we had planned to publish on Tuesday 22 January 2008:

In my view, we are not experiencing a crack at in the strictest sense, but rather a major, widespread crisis that comes as a surprise only to those who are uninformed. A crisis that has existed for many months but which only becomes visible to most people when their stock market investments fall, or when the news reports and amplifies on television the sharp declines in the world’s major equity indices. The sharp sell-off of shares worldwide is nothing more than a reflection of the macroeconomic crisis that has been building up unmistakably for some time. It is one of its many knock-on consequences.

Against a backdrop of deep mistrust, the outcome has been fairly predictable. It is true that the starting gun was as unexpected as it was unknown: very few (if any) foresaw a couple of years ago that the collateralised debt, hammered into AAA status, would blow up in the faces of every investor on the planet due to suicidal securitisation. That really was a black swan. But since that initial spark, the chain reaction has taken a course that should come as no surprise to anyone living in Disneyland. That is why the current economic situation bears far more resemblance to a Perfect Storm than a Crack, since this event, by definition, is a sudden occurrence that leaves no room for reaction, whereas the perfect storm is brewing.

To analyse this development, I think it is worth re-reading articles (both our own and those by others) in the light of the past 8 or 9 months of global financial turbulence and upheaval. We do not in any way claim to possess the gift of prophecy. There are no crystal balls, but there is a certain amount of experience and common sense that sometimes (and only sometimes) helps us take steps in the right direction in anticipation of future events. Most texts stand up very poorly to being reread with the passage of time (try it with your most admired financial authors), and of course our posts are no exception. But when some of our analyses stand up to this re-reading in such a turbulent environment, we feel proud, to say the least. Here are some interesting examples in chronological order:

• Crisis? What crisis? (23 June 2007)
• A historic opportunity or a global economic collapse. Chapter 1 y Chapter 2. (12 and 17 August 2007)
• Fasten your seatbelts. (14 September 2007)
• Managers’ tactics. Each to their own. (30 September 2007) Take note of the forecasts and insights from Gustavo Trillo Garrigues, Head of Asset Management at JP Morgan Asset Management for Spain and Portugal; or those from Alberto Espelosín, Head of Research at Ibercaja Gestión. The most The curious thing is that they’re still in their posts and admired by many, without so much as breaking a sweat or blushing.

Perhaps there were few ideal options eight months ago for responding in the best possible way to the situation looming over our assets. But no one should be taken by surprise, nor should they absolve themselves of all responsibility for their losses. There was, there is and there will be room for manoeuvre, not only to minimise the damage, but also to take advantage of the opportunities offered by the storms, even if these are perfect.

We find ourselves in an environment where we see a great many falling knives, and I’m not referring solely to share prices. But we must not only scrutinise the market to identify the golden opportunities and grit our teeth in an attempt to seize them; the hail of knives is such, and will be so prolonged, that we must also be on the alert for those that may fall directly upon our heads, whilst we search for golden glimmers with our liquidity in hand.

Here’s a chart showing the emotional cycle of the average investor. Take note of the adjectives used and the typical thoughts associated with each stage of the cycle: just like real life.

Whilst the scale of the tragedy seems, in the eyes of many, even greater than anticipated, known or acknowledged, we have always maintained that a good investor must recognise opportunities in critical situations and changing circumstances. Undoubtedly, looking back at past events is a good exercise in self-criticism, especially during such times. Why, in the same scenario where most lose, but some win? If we blame a black swan or at random never We will learn in order to improve, and our losses will never turn into investments.

As we have said on previous occasions, the apparent chaos is nothing more than a new order that we do not yet understand, for which familiar timings and cycles no longer apply. It would not even be of much use to apply lessons from other historically critical moments in the global financial system. That is why we must be even more humble and cautious in our predictions and analyses. In a nutshell: Strategy and Humility. And, of course, plenty of caffeine to keep our eyes wide open so we can spot opportunities and avoid getting stabbed in the back.

Whatever our best wishes may be, your happiness and prosperity in 2008 remains in your hands. I love this game!

Spanish fixed income and money market funds have lost purchasing power in 2007. Only 9 out of a total of 360 so-called conservative funds have been able to outperform inflation. Poor management and the prices charged for it have led 351 funds to obtain a paltry return or even losses. Attention to the percentage: 97.5% of these funds failed in 2007. Well, in reality, it was the investor who failed, as he wanted to keep his capital away from risk and the manager's overheating, which has cost him so much money and so much trouble in the past. Strategic lurches that take him from one extreme to another in terms of risk and investment profiles, but at the hands of the same advisor. A crass and double mistake.

But to return to the Spanish money market and RF funds, their mediocrity is appalling. The curious thing is that there are many millions of euros invested in these funds. capital freezers that only produce cubes of ice to cool the cubatas with which their managers and custodians celebrate their astonishing ability to win clients., The toast to the naivety of those who prefer their investment funds to a simple fixed-term deposit, without going any further. Among their audience, we will find uninformed and weak-willed people who succumb to the pressure of the grandiloquent corsage that the entity places in the front line. But we will also find as participants in these funds the remnants of investors who have been chastened by turbos, forex and other highly speculative investments that are not at all suited to their family's needs, and which have done them far more harm than their manager will ever want to know, let alone know about. take on (I recommend this article of Echevarri).

It seems to be commonly accepted that a money market or conservative RF fund is not capable of equal a simple bank deposit. It is as if, in order to exceed this minimum requirement, it is necessary to take on equity or equity risk. alternative inevitably. Those who believe so must have been viciously hypnotised by their vampiric managers/advisors, in order to bleed them for a bigger slice of their succulent wealth pie through the assumption of higher risk and fees. A way of deprogramming the minds of these investors. handicapped The first way to bring them back to the realities of fixed income markets would be to replace their managers with competent and independent Counsellors. And another, perhaps much more accessible one, would be to participate in the monthly colloquium by Francisco Llinares. Although both the former and the latter may make mistakes and say some foolish things, there is no doubt that the informational and ethical shock they will receive will awaken more than one.

Let us all make sure that next summer the managers of these funds and the advisors who recommend them will have to toast with a toast with a glass of wine. of time, no matter how sweaty and hot they are. And may their irritated chattering throats not be cooled. on the rocks at the expense of the uninformed, the misinformed and the weak. Repeat after me: Not with my ice cubes!
(value on the rocks)

There are now more than 30 Rankia bloggers. This is an incentive for those of us who have the privilege of writing in this economic and financial scenario. We can also enjoy writing content that, we know, interests and helps many investors. This is the greatness of financial blogs. Something that grows and grows without the Establishment The economic and journalistic world can remedy this, although it can criticise or even sue. And anyone who wants to close the doors to this field is wasting his time and prestige.

The proliferation of blogs, wikis and virtual financial publications in general has had a brutal effect in popularising economics. There are countless sites available for anyone interested in the subject to learn, but also to pervert and contaminate their knowledge. investment knowledge. The Internet is like that, with its virtues of freedom and its shortcomings of dangerousness. This is not a university where teaching is regulated, where you have to accredit an academic background and/or pass entrance exams. This is like the street of a neighbourhood, that is a financial district. It is like life itself, where we will find ill-educated people we would rather avoid or mediocre investors/advisors who will be a bad influence. We will see websites of financial institutions with flamboyant virtual neon signs, modest little bars or even real financial brothels that prostitute their employees to clean the pockets of the most candid and/or vicious investors, in exchange for advice and services. brokerage more than guarrindongos. Anyone can give advice on how to invest, even those who do very badly, win or lose. But you can learn even more on the Street than at University. However, we will also find Friends, Analysts, Gurus, Colleagues, Advisors, Brokers, Apprentices, Teachers, Amateurs, Specialists and even Counsellors from whom we will obtain many benefits, not only economic ones. To paraphrase a comparison of my admired JMDV in which he said that «Coca-Cola is the poor man's Moët.«I would say that financial blogs are the University of small investors.

Welcome, then, to the world of finance through a medium so popular, free and interactive despite its drawbacks and dangers. In my opinion, its virtues outweigh its defects. And if not, just ask the majority of young people who share and learn experiences and lessons through these blogs. Some of them will have bad experiences because they have known, read or learnt bad arts that have harmed them. But, heck, we have also been harmed by some of our teachers throughout our formative years! This is the price to be paid for the universalisation of financial knowledge, the globalisation of investment experiences, etc. Thanks to this unstoppable phenomenon, the Establishment The financial system will receive more and better criticism, and it will have no choice but to improve in every way.

It is true, however, that this ease of access to self-taught methods can lead to reckless «...the use of self-taught methods can lead to a lack of confidence".«Juan Palomo... when I buy they fall plumb down!»Believing themselves to be self-sufficient and saving as much commission as possible, they will not be able to invest better. But some of them will be able to invest on their own with the knowledge they were able to access academically, if they add the good that the network offers them. Unfortunately, this inducement to invest in the Juan Palomo is reckless for many (I would say the majority), who will not reach the minimum level not to leave. cyclically The most capable ones will eventually be cured of their mistakes and not be ruined for good. Only if they learn from their mistakes and don't ruin themselves for good will the more capable ones eventually become more mature.

Nevertheless, I repeat that in our opinion the benefits outweigh the disadvantages. We modestly try to contribute to advise from our experience so that the readers can avoid some mistakes in their patrimonial approaches, and can improve by avoiding some scars. In all likelihood the rest of bloggers have similar motivations and I would not believe that advertising revenue is the motivation of any of those in Rankia, as some seem to think. Revenues that, by the way, this blog has always renounced and that we would not even know how to quantify. It would be absurd to give philanthropic advice to small and medium investors, and at the same time share the advertising income with Rankia. We think it is better that this money contributes to maintaining this blog. financial district where we can all freely share advice and experiences. Some useful and some polluting, but all of them well-intentioned, free and accessible.

Coca-Cola is the Moët of the poor, as I used to say JMDV, but in some financial blogs we can find authentic Moët Chandon in recyclable Coca-Cola glasses..

Here's to Juan Palomo, his prudence, humility and also to the honesty and independence of his future advisors.

And I'd much rather do it with Moët in a Coke glass than with cheap sparkling wine in elegant bottles and fine crystal glasses.

The ban has been lifted. It seems that anyone without a wallet uncorrelated If you’re not keeping up with market trends, you’re not investing your money wisely. And how is that being done? Well, through the ineffable Alternative Investment, a real catch-all term if ever there was one. Call it alternative investment, call it decorrelation, call it hedge fund, call it God, call it a divine being, call it energy… The point is, anyone who doesn’t sign up to invest their money «alternatively»is frowned upon by" analysts In general. The approach seems to be to insulate oneself from an uncertain and volatile market through a range of strategies, including arbitrage, long and short positions in equities, fixed income, commodities, traditional and renewable energy, metals, investment in unlisted companies, venture capital, and a host of other options as diverse as the market itself.

I’m not saying that decoupling oneself from general market trends is a misguided strategy; only time will tell. But it is very dangerous to entrust a large portion of our capital to a management firm whose name encompasses any strategy, however erratic, controversial or incoherent it may be. Fashion and fear drag us into excesses that stray from a rigorous and dispassionate analysis of the right strategy for each individual, for each specific portfolio. Some managers and advisers dismiss any investment that is not alternative as obsolete and/or risky, and it seems that anything that is not alternative is unsustainable in this new world order, which still seems to us to be more chaos than order. But from our perspective, market decoupling cannot be a mass strategy of not a safe haven for our capital, but simply another option to be used as part of the diversification strategy tailored to each individual portfolio. This is particularly true given the lack of transparency and the wide variety of investments we expose ourselves to when we embrace alternative investment. It is just as dangerous to regard an equity investment as safe as it is to channel our assets into venture capital firms, for example. How can anyone regard such diverse alternative investments as a conservative strategy? In the current climate, not even top-tier non-sovereign fixed income offers an absolutely solid safe haven, as we have seen in this credit crisis. Therefore, we must not fall into the trap or delude ourselves into thinking that decoupling from the market allows us to safeguard our investments from danger. Not if we do so in exchange for the concept of «Alternative Investment», which is nothing more than a giant catch-all where our investments will be at the mercy of the free will of the managers who get their hands on our capital. Time will tell whether this strategy is sound or not, depending above all on what investments are made under this blanket alternative label. But under no circumstances can we regard it as the epitome of a conservative strategy, however much decoupling from the market we achieve. On paper, it would seem that staying on the sidelines of market trends reduces our risk, but in practice we will be allowing various fund managers, whom we will never get to know, to engage in risky practices with our capital. Furthermore, there is the more than likely increase in costs and fees, which are uncontrollable due to the very diversity of the investments.

As has been reported ad nauseam in various media, This is a widespread trend among high-net-worth individuals, but in our experience, it is very difficult to apply to the average, unsupported investor. What is a carefully executed strategy by family offices for large fortunes can turn into a veritable bloodbath for smaller fortunes, leaving them at the mercy of traditional private banking at best. Giving carte blanche for an average or small fortune to be invested «alternatively» in a myriad of opaque strategies, with the well-intentioned aim of decoupling from the market, is more than reckless without rigorous monitoring of each of these investments. In many cases, it is like signing a blank cheque to invest in any kind of financial venture. Furthermore, most managers, let’s say «traditional«, are jumping on the bandwagon of hedge funds (yet another catch-all euphemism) whose workings they are completely unaware of. In fact, very few would pass the litmus test if we were to ask them to explain in detail the alternative investments into which they are channelling our money. But unfortunately, most of their clients will happily pay commission upon commission just to feel secure in the knowledge that they are uncorrelated with the market.

Once again, the protocols and investment strategies employed by high-net-worth individuals are not easily applicable to the average investor. Generally speaking, the service received by a portfolio without the support of a multi-family office tends to be far less competent, rigorous and independent. And in this case, market decoupling and alternative investment in general require close professional monitoring, which the average investor’s wealth does not usually have access to. That is why much of this capital jumps out of the frying pan only to land in the fire—albeit an alternative one. Meanwhile, other managers rub their hands together with glee.

Every day we see more and more platforms such as AllFunds o Luxornet, for example, which offer all kinds of international investment funds and even a wide variety of structured products. They are primarily aimed at financial institutions capable of placing these products with their clients. It is something of a permanent exhibition where every conceivable product is on display, enabling intermediaries, financial advisers and the like to compile their own catalogue.

A very common feature of these platforms is the lack of in-house products. In other words, these are «wholesalers» that offer a wide range of financial products which generate commissions for the retailers which distribute them without giving preference to one financial institution over another. Furthermore, there is virtually no advice provided, as it is assumed that this is carried out by the financial intermediaries who sell the products at retail level. All of this lends it a not inconsiderable air of independence, as it leaves behind the the traditional relationship between banks and financial advisers, which completely undermined the advice received by the end investor. Financial intermediaries will, unfortunately, continue to charge commissions on products sold, but at least there is the certainty that they will be paid by the platform for placing any Thanks to its vast catalogue, it will ensure that the investment choices made for its clients are, in theory, more carefully considered and potentially more successful. Some of these platforms require purchases to be made through a specific investment bank, which has nothing to do with the chosen product, but most do not even require that.

Clearly, that approach is still a long way from a genuine and healthy client-counsellor relationship/A solicitor who is paid on a fee basis. As we have mentioned on other occasions, if the advice is provided on a fee basis in itself, can and must to be completely and truly independent, passing on to the client any commission received from these platforms or directly from investment banks or private banks. In fact A rigorous multi-family office will save its clients far more than its fees through this approach alone. Very often, the best investment for a client is not the purchase of a financial product, and so it may not be in the advisor’s best interests to earn any commission at that particular time. However, if the adviser has to earn a living through commissions, the temptation to sell as much «fish» as possible before it goes off (the maturity of structured products, for example) will take precedence over what is actually in the best interests of each specific investor and their families. Furthermore, traditionally, the ‘fish’ comes from just one or two institutions with which the adviser has signed collaboration or referral agreements. In other words, this is advice very similar to what you might receive from your own ‘trusted’ bank manager – that is, a voracious coffee for everyone.

The slow but steady roll-out of these platforms means that the catalogue selection of the retailer towards their clients is significantly greater. This allows for more professional advice without any loss of remuneration for the broker/adviser. Clearly, this is not the ideal scenario in which the investor-broker relationship should be established/counsellor, but it is an improvement on the way they are currently being treated, being ruthlessly forced to buy their own bank’s products or eagerly persuaded by commission agents or so-called financial advisers to invest in the products recommended by the bank.

Lately, even these platforms are being used by some high-net-worth retail investors, and they are increasingly resembling a business retail than an older person. This phenomenon, which we view as positive, is similar to what has led to the emergence of the well-known ETFs. In other words, the globalisation and popularisation of financial investments, which is spreading day by day, largely thanks to the internet, which facilitates this accessibility—something that, until a few years ago, was reserved for the financial elite.

Continuing with the analogy from the title of this article—that of the pedlar or merchant who supplied local residents with basic provisions in remote corners of the ancient world—we have evolved towards the large, 24-hour hypermarket just a click away, where we find A vast array of products: interesting, superfluous, tedious, reckless or simply unsuitable for a specific client. It is therefore highly advisable for 99.91% of investors that a specialist, who is well acquainted with their financial and family circumstances, helps to draw up the shopping list on a regular basis. To tailor this list to the family’s current and future financial needs and to what they already have in their pantry, they must be thoroughly advised by those who know the hypermarket well, its offers, special deals and the quality of its products. And not to follow the recommendations of outdated advisers single-brand who simply recommend shopping at the corner shop because the revenue from their misnamed advice comes almost exclusively from the owner of that very shop.

Some investment banks have already picked up on this trend and are jumping on the bandwagon. Something is changing on the investment horizon, and private bank managersThat's something, isn't it? utterly outdated in light of the new landscape in which some investment banks are operating. Multi-level marketing techniques such as those used by Citigroup, or even Fibanc with personal advisors freelance who are peddling their products left, right and centre will have to rethink their strategy, which until recently was both innovative and exceptionally aggressive.

Any bank that continues to seek out customers in order to sell them its own products as a means of boosting its turnover has no future in the medium term.

Now, pioneering banks are positioning themselves by sourcing products through these platforms and creating bespoke products for customers. They are not looking for customers for their products (they downplay their own products) but rather products for customers. Customers who, moreover, are not necessarily the bank’s own clients to begin with, but are mainly referred by those who best understand their specific needs: multi-family offices, financial institutions and even independent financial advisers. As it should be. It is a pity that most of them continue to follow in the footsteps of the traditional commission-based broker, as long as payment for advice is not widely accepted.

Globalised specialisation appears to be leading the traditional private banking sector to bring together, under the umbrella of financial soundness, three pillars on which it will base its business:

1. Exclusively bespoke product design.
2. The search for professional product developers (pure investment banking).
3. The collaboration between multi-family offices and independent advisers who provide support to clients constitutes the third fundamental pillar.

Customers are no longer primarily clients of the bank; instead, they are increasingly turning to multi-family offices and independent advisers in whom they place their trust, not their money (or at least it never should). So banks are now trying to provide services to these companies so that they can meet their customers’ needs using the tools and platform offered by the bank’s umbrella organisation. This allows the bank to avoid the extremely costly, aggressive advertising campaigns typically used to attract customers, the opening of branches across the city, or the creation and maintenance of hordes of internal and external personal account managers. And at the same time, it allows these firms to maintain a more than acceptable degree of independence, given that the products to which they have access through that bank are universal. A smart, proactive and intriguing strategy if ever there was one, which is sure to succeed in the short and medium term. Could this be the strategic alliance we were calling for the last AugustHard to believe, isn't it?

Private banking is dead. Long live banking!

Releyendo nuestro artículo pre-crack estival titulado La Economía mundial y la teoría del caos escrito el 14 de Julio, parece claro visto lo visto a finales de este histórico 2007, que nos encontramos en un momento financiero mundial que constará en los libros de texto de las futuras generaciones de estudiantes de economía. Pero todavía no sabemos si se hará referencia a esta era como la crisis del 2008, 2009 o, quién sabe, la del 2014 por ejemplo.

El Nuevo Orden Mundial tiene más de nuevo y de mundial que de orden. Los ciclos históricos económicos de gran cantidad de sectores han saltado por los aires y casi nada sigue un patrón cíclico al que nos hemos acostumbrado durante muchas décadas. Los timings de burbujas, cracks y ciclos ya no siguen los caminos acelerados respecto al anterior como han ido haciendo en los últimos años. Las reglas del juego del escenario económico mundial han cambiado radicalmente. Aparentemente ni siquiera las hay, pero probablemente sí existan aunque todavía no seamos capaces de identificarlas entre el aparente caos existente.

El petróleo ha dejado de ser cíclico, Fernan2, maestro del crudo, ya lo advierte en various articles que ha ido publicando a lo largo de los últimos meses. También las divisas están convulsas por la irrupción de una segunda moneda de referencia importante (€) donde apoyar el buque insignia de las divisas ($). La globalización del carry trade y la no fluctuación del yuan chino que exporta y crece a ritmos jamás imaginados, hacen el resto. Los EE.UU., en auténtica economía de guerra, extraen petróleo militarmente de Irak y someten la cotización del € a su favor mientras subvencionan sin otra alternativa a morosos y usureros que tambalean el sistema crediticio con sus abusos. Los metales preciosos suben sin tener claro hasta dónde ni por qué, y los bancos caen en bolsa y desconfían unos de otros. No existe una consigna clara para refugiar el dinero con una inflación más que considerable, sobre todo a los españoles a quienes el ladrillo se les desmenuza entre los dedos y el Euribor en forma de hipoteca abusada también les echa la soga al cuello como a muchos hispanos de Norteamérica. ¿Caos o nuevo orden mundial que todavía no somos capaces de concebir y acotar para diseñar las estrategias razonables más adecuadas? El tiempo dirá, de hecho dice día tras día.

Se produjo un importantísimo cambio (como muchos intuimos en aquel momento) a partir de aquel 11-s de 2001, aunque la inercia del gran buque económico global ha tardado unos pocos años en mostrar los primeros indicios de ese cambio de rumbo y escenario mundial. Pero que no cunda el pánico, la capacidad humana para equilibrar y estabilizar la economía mundial históricamente ha podido con todo. Eso sí, se ha llevado por delante muchas y enormes fortunas como por ejemplo las de los infelices que saltaron de los rascacielos de Manhattan a finales de 1929. Pero aunque personalmente considero el panorama actual potencialmente más transcendente que un simple crack bursátil, estoy no obstante convencido de la capacidad global de reequilibrio. Es decir, la globalización tiene un efecto multiplicador para contagiar por ejemplo la crisis subprime pero también incrementa proporcionalmente la capacidad de la economía mundial de reequilibrarse concertadamente. Otra cosa es el reequilibrio geopolítico que los dirigentes del planeta sean capaces de conseguir pero, con el permiso de las religiones, siempre he creído ciegamente en la capacidad humana en los momentos difíciles. De hecho el reequilibrio económico facilitará muchísimo el geopolítico.
En definitiva, la Globalización que nos ha llevado a la situación actual, que no es todavía ningún punto de inflexión (al menos positivo), por nuestra mala cabeza, debe servirnos también para ayudarnos a estabilizar la economía del primer mundo que sienta las bases de nuestro Sistema. Algunos diréis que quizás sea mejor no encontrar esa estabilización y comenzar la fundación de un nuevo sistema más justo y con menos desequilibrios entre el primero, segundo y tercer mundo. No digo que no fuera más justo, pero egoístamente confieso que prefiero el reequilibrio del Sistema capitalista que hasta hoy conocemos por estos lares.

La globalización es a mi entender la clave que ha hecho que los ciclos y escenarios históricamente mínimamente predecibles ya no se puedan repetir tal y como los hemos conocido y estudiado. Estamos sentando una nueva praxis sobre la que se teorizará en el futuro, pero no hoy. Las aguas se volverán a encauzar, pero en otros cauces desconocidos y no por ello menos estables o productivos que los que conocimos antes del 11-s y que ahora empezamos a darnos cuenta de que quedaron definitivamente atrás.

The cisnes negros nacen grises, y hay que saber apreciarlos en todo su esplendor y rareza. Si toda crisis es una oportunidad, estamos ante la madre de todas las oportunidades. Mantengamos los ojos bien abiertos y que Dios reparta suerte.

Feliz Navidad y próspero Caos Nuevo 2008.