FROM THE DECKCHAIR

Qui resistit, vincit

Perseverance, patience and commitment to an investment philosophy are the indispensable cornerstones of value investing

01 · 10 · 2017
JESÚS Herrero Yagüe

2 minutes

He who persists, prevails. So goes Persius’ Latin adage which many years later would be repeated by Camilo José Cela. I have reasons to concur.

I have been married for almost as long as I’ve been investing in the stock market: since 1970. I remember both dates very clearly because I returned home early from my honeymoon in an ambulance (my health at that time was rather delicate) and shortly afterwards my small stock market investment was to plummet in the wake of the first oil crisis.

So I can say without hesitation that I didn’t exactly get off to the best of starts in married life and even less so as an investor.

However, despite this inauspicious beginning, some 47 years later I have to recognise that lady luck has smiled on me – in both senses – yielding much cause for satisfaction and more than a little joy. Of course, there has been the occasional upset on the way, but on balance life has been very positive.

I am fully aware that the reader of this blog has absolutely no interest in my marital reflections, which are as banal as those of any other long-standing relationship, but perhaps the lessons that I have learnt from my modest experience as an investor might prove less irksome.

I started investing a long-time ago, at barely 26 years of age and with a few initial paltry savings. Mutual funds didn’t exist back then in Spain, meaning that you had to invest directly in shares. I have never been a fan of so-called fixed income (a misnomer as many have found out), so I have always invested in equities.

I was one of the first people in Spain to invest in mutual funds when they initially appeared, although back then they were limited to the money market. I eagerly awaited the arrival of equity funds.

My initial setbacks forced me to acquire a better understanding of the complex world of the stock market.

By 1973, the value of my investment had dropped to around half of my starting capital (much like my health). After running aground in such a fashion, a more mature and prudent person would probably have doused their sails and abandoned the tempestuous seas of the stock market. Fortunately, this wasn’t what I did. Although I was quite disheartened by my poor start, it also fuelled my thirst for knowledge and forced me to attempt to understand this complex world.

And so, having read various wise books and armed with my own foolhardiness, I maintained and even increased my investment, trusting that investing in the stock market had to be the most sensible and promising approach despite the volatility, crises and cyclical depressions.

Eventually, equity funds did reach Spain, but I struggled to find any that were managed to my liking. Once again, I was close to giving up. But I resisted the temptation.

Until one day, a twist of fate brought me in contact with the work of an intelligent asset manager called Francisco García Paramés, to whom I hitched my wagon as an investor – probably for the rest of my days. He convinced me that I was on the right path, and it proved to be the best financial decision of my life.

So here I am in Cobas, 20 years on from first discovering him, yet another loyal and modest shareholder. And, just as with my wife who has been at my side all these years, I can only congratulate myself for having discovered and “married” this exceptional asset manager.

Perseverance, patience and commitment to an investment philosophy are the indispensable cornerstones of value investing. Time has proven him right and with it he has earned my trust.

Qui resistit, vincit.

THE BLACKBOARD

UNDER THE DESKLAMP

APPROACHES

FROM THE DECKCHAIR