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Holly LaFon
Holly LaFon
Articles (10163)  | Author's Website |

Ask Francisco Parames Your Investing Question for GuruFocus Q&A

Interview with 'Warren Buffett of Spain'

October 19, 2018 | About:

Spain’s premier investor Francisco Garcia Parames is joining GuruFocus for an audience Q&A this week in advance of his talk next year at the 2019 GuruFocus Value Investing Conference

To submit your question for Parames, post it in the “comments” area below, and he will return an answer shortly.


Parames spent 25 years at Spain’s Bestinver before founding his own firm, Cobas Asset Management, in 2017. During his tenure overseeing the Bestinfond (Trades, Portfolio) at Bestinver, Parames delivered an annualized return of 15.68%, compared to the 8.45% return of the benchmark, making him Spain’s most successful investor.


Parames, a devotee of Ben Graham and Warren Buffett (Trades, Portfolio), implements the same principles at Cobas that guided his stock picking over his career. He seeks undervalued stocks with long-term outperformance potential, using market volatility to buy at lower prices. Moreover, many of his ideas are contrarian. “We buy what no one seems to want and sell what everyone wants to buy,” Cobas says.

One change he will make, though, is to invest in high-quality companies rather than just cheap companies.

“When you're young you want to achieve a quick, high return and you think you can get it with cheap companies, so you avoid quality companies that are more expensive,” he told Citywireselector. “Over time you realize these cheap companies are cheap because they are regular businesses and things can go wrong. You've fallen into a value trap.”


Parames has compiled his investing insights in a new book, “Investing for the Long Term,” published in June. Written in the form of an investing memoir, the book discusses his influences, risks and big decisions he has made over his career, in addition to giving investing advice and market insight.


Cobas’ top holding is Switzerland’s Aryzta AG (XSWX:ARYN), a specialty food and baking company with a global presence. Parames shared some of his thesis on the company in an August shareholder letter:

“With Aryzta (XSWX:ARYN), we now have a company with an elevated debt level (1.8 billion euros, excluding the value of its subsidiary Picard) and an EBITDA that has shrunk from 600 million euros to 300 million euros expected, with the share price falling by over 84% from the maximum levels hit midway through 2014, nearly 90 Swiss francs per share, to bottom out this year under 15 Swiss francs per share. Similar to Smurfit Kappa, this stable and cash-generating business will gradually reduce its debt despite a financial situation that is hardly simple.”

His next largest holdings are Teekay Corp. (NYSE:TK), International Seaways Inc. (NYSE:INSW) and Israel Chemicals Ltd. (XTAE:ICL).

See his portfolio here, and read more about his thinking in his second-quarter shareholder letter here.

Don’t forget to ask your investing question in this comments section below!

About the author:

Holly LaFon
I'm a financial journalist with a Master of Science in journalism from Medill at Northwestern University.

Visit Holly LaFon's Website

Rating: 5.0/5 (5 votes)



Vgdlpc - 1 year ago    Report SPAM

Dear Sir,

What’s your opinion about what is going on with Spanish company DIA and the way the CNMV is acting? On Monday share price dropped more than 40% and a lot of small investors got trapped with big loses. What’s their best option now?

Thank you very much,


Samuel2000so - 1 year ago    Report SPAM

Dear mr Paramés.

It is huge pleasure to be able to ask you some questions. I hope that this questions turn out to be interesting for you:

- What is your favourite indicator when you are checking the financial situation of a company?, do you think that the future of a good investment is more bounded to the ability of the company to keep growing (wich probably will implicate a higher PER ratio than the average) or it is better in your opinion the acquisition of companies more stables?

-What is your opinion of what is going on with the automotive sector the last month, do you think that this drop of the prices are a good oportunity?

Thank you very much for your time and best regards from Madrid,


Slava Vershkov
Slava Vershkov - 1 year ago    Report SPAM

Good afternoon! Just 3 questions:

1) how do you recognize mistakes? Where is the difference between temporary problems (when courage to buy more is needed) and wrong thesis (when courage to sell is needed)?

2) how do you calculate position weighting in a portfolio?

3) do you have a single measure for intrinsic value or use all appropriate ones?

Thank you!

Longmile - 1 year ago    Report SPAM

IF the worlds largest economy and having its currency as a reseved currency is governed by a megnomaniac where should one invest.>

Cirros premium member - 1 year ago

Good Day - Do you see any sytematic risks currently (like the hosing bubble of 2008) that could casue a another recession/bear market in the next 2 years?

Vgm - 1 year ago    Report SPAM

Hola Francisco, thanks for taking our questions.

My question: You have a few UK stocks in your portfolios (Babcock, Dixons). Are you cautious of further investments in the UK because of the unknowns around Brexit, or do you see this as a buying opportunity? There would appear to be quite a few undervalued stocks in the FTSE.

Russell.K - 1 year ago    Report SPAM

Dear Francisco,

Thank you for giving us this opportunity to ask you questions about investing. My question is how do you value stocks and what criteria do you use to find if your stocks are undervalued?

Moneyfarmer - 1 year ago    Report SPAM

Dear Mr Paramés,

as an engineer with a keen interest in value investing I would like to ask for your advice on how to get involved in value investing professionally. Would you recommend doing an MBA (e.g. at IESE) to that end?

Kind regards,


Maarten.janssens1 - 1 year ago    Report SPAM

Dear Mr. Parames,

Thank you for taking our questions.

I have a two questions about stocks that are currently in the portofolio of Cobas.

- Teekay LNG lowered its DCF from 0.7 p/q to 0.14 p/q in 2015 to finance the newbuild program. To what level do you think management will eventually increase the DCF when all the ships come online?

- Aryzta wants to implement a large capital increase. If they fully implement this, do you think the shares are still worthwhile buying at current levels or will the dilution be too great?

Kind regards,


Valueinvestorsmadrid premium member - 1 year ago

Dear Mr, Parames,

What was your bigger mistake in the markets ? When and how much ?

I should be gratefull if you can reply me .

Kind regards


Marcuskalata - 1 year ago    Report SPAM

Dear Mr. Parames,

I would like to ask for your opinion about dividends. Some people think that dividends are the only and genuine source of value. That is, a company has value because can pay dividends currently or because it will be able to do it in the future. What is your focus on the dividends? Are they important for you?

Other questions:

- Telefonica. Do you think that now is a god moment to buy it again? In General, how do you see the communication sector?

- Anheuser-Busch inBev and Imperial Brand (for example). Tobacco and Alcoholic drinks companys have historically had a good performance. Currently they look quite cheap. Do you recommend such companies for the long run?

Thanks in advance.


Pokornyrich premium member - 1 year ago

Dear Mr. Parames,

we have recently acquired shares in Aryzta and I am following current situation very closely. What do you think could be "real" motivation of BoD for urging shareholders to approve 800 m EUR capital increase? I am definitely not supporting massive dilution, but at the same time we acquired Aryzta shares also due to "complete trust in management capabilities" and we are not happy with current disagreements betwen Cobas and BoD.

Thank you very much


Rmoesker premium member - 1 year ago

Dear Mr. Parames, thanks for your great book including Austrian economics. Question: why do you not show a target price and upside to mark to market at Cobas like you did at Bestinver starting in 2008?

Khurrum - 1 year ago    Report SPAM

Hi Mr. Parames,

A question about your investment process - with so many different ways to screen for suitable investment opportunities from quantitative screens to general news reading and checking what other investors have invested in, how do you go about shortlisting your ideas - how do you decide which names to discard and which names to spend some initial reading time on and then from there how do you decide whether to spend even more time or stop reading and move to the next idea.

Secondly - in what order do you tend to research an idea - start with annual report, investor presentations and earnings call transcripts or some other way?

Thank you

Rbayer319 - 1 year ago    Report SPAM

Mr Parames,

Thank you for considering my question. Six yrs ago I purchased Spains telecom giant TEF. The stock has performed very poorly. It has lost 60% of its value. What are my options now. I am willing to wait another yr or two but I am concerned that TEF/ Spain will not have any meaninful performance improvements (ie, a gain of 25% +). are there option trades I should use to try to recover some capitol? Is there any hope of M&A to rescue this position??

Thank you and keep up your good work.

- Robert Bayer

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