To progress in the world of finance, a good option is to inform ourselves and read about the most successful investors and entrepreneurs of our times. For this reason, the phrases of Francisco García Paramés can be very useful. He is one of the most influential and important European investors today and surely we can learn something from him.
In this article we will list the eleven best phrases of Francisco García Paramés and we will talk a little about who this Spanish investor is. What's more, we will comment on the Austrian theory of the economic cycle, that is part of value investing. It is an investment strategy highly appreciated by this Spanish investor, and by other very famous economists and businessmen.
The 10 best phrases of Francisco García Paramés
So that you feel more encouraged to read the phrases of Francisco García Paramés, we are going to emphasize that he is one of the investors of the value investing most recognized. Today he is the fund manager at Cobas AM. In addition, he wrote a book called "Investing for the long term: my experience as an investor", also highly recommended. Previously, Francisco García Paramés has proven to be capable of obtaining excellent and sustained returns over time, when I worked at Bestinver. Many of his reflections synthesize the investment methodology that he applies. Next we are going to list the eleven best phrases of Francisco García Paramés:
- "Speculators and volatility are our friends, the more there are, the better results we will get in the long run."
- “The lack of liquidity is also our ally. Other investors pay too much for that liquidity.”
- "Investment is a long-term business where patience determines profitability."
- “Walk the roads where there are no people. Buy what no one wants."
- "Invest in shares all your savings not necessary for the near future."
- "If you want to learn economics, learn German and study the Austrians."
- Be an asset owner, not a lender. Loans are a promise that sometimes goes with the wind.”
- "The most fascinating aspect of value investing is that time is always on your side."
- «When we sell a value?, we always answer: when there is a better opportunity. That is our permanent goal, to improve the portfolio every day.”
- "The value investing preaches the idea that the efficient market hypothesis is frequently wrong.
- “Why do I do what I do? What is my motivation? (…) I have already said that being an analyst fit in with a way of being reflective and shy, and this, together with the support of reading, formed a good basis for my personal development. The work itself was rewarding to me. It is already known that the feeling of mastery of a task creates affinity towards it and it is not necessary to have a preconceived idea of predestination. Things just happen that way."
Who is Francisco Garcia Parames?
Now that we know the best phrases of Francisco García Paramés, we are going to explain who this man is. He was born on December 22, 1963 and today he is a Spanish investment manager. Specifically, he performs the role of fund manager at Cobas AM, It is also known as "the Warren Buffett Spanish", due to his great success as an investor, mainly following the strategy of value investing, or value investing. In fact, Francisco García Paramés is considered one of the most influential and important European managers in the financial world. In 2014, he managed to manage around ten billion euros.
The management style of Francisco García Paramés is based above all on the strategy of the so-called value investing (value investing), of which the famous investors Warren Buffett are supporters, Peter Lynch y Benjamin Graham, for example. Inside of the value investing, Francisco García Paramés remains within the framework of the Austrian theory of the business cycle.
It should be noted that this Spanish investor graduated in Economics from the Complutense University of Madrid and an MBA from the IESE Business School of the University of Navarra. In 2016, Francisco García Paramés was awarded an honorary doctorate in business from the Francisco Marroquín University, Guatemala.
TACE (Austrian Business Cycle Theory)
The so-called Austrian Business Cycle Theory, or TACE, was developed by economists belonging to the Austrian School, including Ludwig von Mises and Friedrich Hayek. In this theory they explain the relationship between economic growth, bank credit and investment errors that accumulate massively in the upswing of the business cycle. As a consequence, it ends up bursting like a bubble and destroying the value.
The TACE maintains that investment tends to increase, creating a false economic boom, due to an artificial expansion of credit. In other words: It is due to the increase in credit that is not backed by previous voluntary savings, but rather created by the downward manipulation of the interest rate. A) Yes, relative prices are distorted by the growing mass of money circulating in the economic market. These investments, which would not have occurred were it not for price distortions, divert accumulated capital goods to projects that are not profitable. As a consequence, one or several assets end up being overvalued, creating the famous bubbles.
Inevitably, these bubbles end up bursting sooner or later. Once the issuance of the new fiduciary media has ceased, those interest rates that are artificially low end up being accommodated in what would be their real level in the market. Generally, this is usually much higher than that established by central banks, due to the scarcity of capital goods. This event abruptly cuts off the flow of cheap credit. And what about investments? Well, those that seemed so profitable with their inflated prices suddenly cease to be. It is at this moment when the crisis breaks out and erroneous investments end up being liquidated naturally.
I hope that the phrases of Francisco García Paramés have been inspiring for you! You can leave us your favorite investment ideas or strategies in the comments.