When I was 20, I read a book about value investing by Peter Lynch called “Beating the Street”, and I remember coming across a magnificent phrase: “Be flexible and humble, and learn from mistakes.”
From Peter Lynch, I understand that long-term equity returns trend upwards and that one shouldn’t worry too much about short-term fluctuations. Asset managers who have benefited from short-term falls are usually humble and flexible people who aren’t afraid to act after making a mistake.
This is the pervading mindset of the Investor Relations Department at Cobas Asset Management, a dedicated team working exclusively to attend to the needs of shareholders.
Our asset management firm has very clear values: honesty and transparency.
Why honesty? Because we are not looking for an active capture or to incite shareholders to hand over all their wealth. Instead, we encourage them to invest what they can afford in the long term. We therefore strive to maintain a sincere and trusting relationship with our investors because we also invest with them.
And why transparency? Because we understand that equity funds are volatile, though ultimately allied with value investing, and we know that they could fall during the investment period. However, these falls only occur in the short and medium terms, which is when we should exercise patience. Given that recoveries take place in the long term, one should know how to wait. In other words, we strive to always be as clear and transparent as possible with out co-investors.
As asset managers, we have our sights fixed on a single target: increase the savings for our current portfolio of over 22,500 participants. At the Investor Relations Department, we work to instil the mindset of value investing at the individual level. When facing falling funds, we should remain calm and understand that the market, which is heavily influenced by its short-term dynamic impulsiveness, will eventually recognise the real value of shares in the long term. In reality, this represents a new opportunity for us.
We need only go back a few weeks for the following example: International funds were affected by the capital increase at Teekay and the profit warning by Aryz, two of our main positions, with falls of over 8% to dip below the initial net assess value (€100).
Our response to the market’s penalisation of these companies was to let our participants know that we not only held onto these shares but also continued trusting in both investments and even increased our position in them.
Regardless of the invested capital, the person is what matters to us
One of the main activities of the Investor Relations Department at Cobas is to travel to different places in Spain to get to know our investors. Regardless of the capital invested with us, people matter the most to us, and we demonstrate this resolve by being available to help address questions and concerns related to their investments.
Peter Drucker stated that the purpose of a business is “to create customers”. Our purpose at Cobas is not to create but rather to take care of our customers.
The Investor Care Helpline is the right hand of the Investor Relations Department at Cobas. While certainly behind the scenes, the helpline works in line with our values because there is instantaneous communication between both departments.
Antoine Saint Exupery couldn’t have said it any better than, “And now here is my secret, a very simple secret: It is only with the heart that one can see rightly; what is essential is invisible to the eye.” In its first year of operations, Investor Care has taken over 60,000 calls. This department is the first line of contact that many investors have with Cobas. We therefore make an effort every day to improve this initial experience.
Eight years have passed since I first read Peter Lynch. People close to me who know that I enjoyed this investment philosopher, are happy to find me here at Cobas.
I had the opportunity to join the world of Value Investing and meet Francisco García Paramés (Paco) in early 2017. One could define his relationship with the market with the metaphor of the terrestrial sphere straight from a line in “The Little Prince”: “The Earth is not just an ordinary planet! One can count, there, 111 kings (…), 7,000 geographers, 900,000 businessmen (…), 311 million conceited men. That is to say, about 2,000,000,000 grown-ups.”
This reminds me of the market, where everyone is doing the same thing, while at Cobas we are looking for investment opportunities in companies that attract the attention of only a few investors or are undergoing certain junctures in their existence, because we go against the grain.
In fact, the Investor Relations team is young spirited and constantly up to date, relating and exchanging ideas with asset managers who share the same philosophy, willing to travel all over Spain and abroad to address concerns and dispel the doubts of participants.
As Saint Exupery penned: “Walking in a straight line, one cannot get very far.” For this reason, our team inexhaustibly looks for new paths.