<\/p>\n
Value investors are a dying breed these days. That\u2019s what makes the story of Francisco Garc\u00eda Param\u00e9s and his ever-expanding band of acolytes in Spain so surprising.<\/p>\n
Over a four-decade career, Param\u00e9s has reached legendary status in value circles by churning out top-tier returns year after year. His flagship \u20ac1.2 billion\u00a0($1.4 billion)\u00a0Cobas Internacional fund achieved an average annual return of 20% in the past five years, after a run at asset manager Bestinver that earned him comparisons to Warren Buffett.<\/p>\n
Alongside his rise, other investors adopted his same \u201cbuy cheap and be patient\u201d ethos, turning Madrid into something of a value investing hub in Europe.<\/p>\n
Fund managers at Azvalor Asset Management, A&G Global Investors and Magallanes Value Investors have all worked alongside Param\u00e9s or been influenced by his philosophy, and at least seven value shops have sprung up in the city in the past decade.<\/p>\n
Read: As Warren Buffett prepares to retire \u2026 Does his investing philosophy have a future?<\/p>\n
\u201cIt is something unique to Spain, the fact that Param\u00e9s\u2019s success opened the way for flourishing value boutiques,\u201d said Francesco Paganelli, who researches fund managers for Morningstar Inc.<\/p>\n
The emergence of Madrid\u2019s value club stands out at a moment when Wall Street is enthralled with the speculative promise of AI, and when metrics like price-earnings ratios seem to matter less.<\/p>\n
And in Spain, stocks tend to be a hard sell. The majority of individual savers still prefer to put their cash in real estate or bank deposits.<\/p>\n
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But despite that, Param\u00e9s\u2019s contrarian style of managing money has won him a devoted following. In conversations, his loyalists speak about value investing as a mindset\u00a0as much as a way of picking stocks.<\/p>\n
They see it as a discipline of rejecting herd mentality and embracing the delayed gratification of bets that take a long time to pay off. More than 500 people turned up to Cobas\u2019s investor conference this year.<\/p>\n
Read: The markets don\u2019t repeat, but they rhyme<\/p>\n
\u201cI\u2019ve been in one of these and it\u2019s like going to a soccer game full of fans,\u201d said Marc Badia, an accounting professor at IESE Business School in Barcelona. \u201cIt\u2019s not the same as Warren Buffett; this is not Omaha. But it had this kind of flavour.\u201d<\/p>\n
Param\u00e9s, 62, describes his strategy as buying cheap assets and being patient, saying that many of his best picks have been medium-sized, European companies that have less analyst coverage.<\/p>\n
He made his name during a more than two-decade run at Bestinver, where he delivered 16% annual returns. In 2014, he left the firm and launched Cobas in 2017.<\/p>\n
\u201cWhen I discovered Peter Lynch and later Warren Buffett, I found a solid intellectual framework for investing: buying assets below their intrinsic value and being patient,\u201d Param\u00e9s said by email. \u201cWe are not trying to predict the future or make macroeconomic bets.\u201d<\/p>\n
Read: Peter Lynch\u2019s simple secret: Why behaviour matters more than brilliance in investing<\/p>\n
Peter Smith\u00a0at Palm Harbour Capital\u00a0is one of his disciples. He got his start fresh out of business school by pitching stock tips to Param\u00e9s at Cobas. After working at the firm as an analyst, he left to start his own firm in London with an investment from Param\u00e9s.<\/p>\n
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\u201cWe basically look for the same kind of things. Things that are out of favor, unloved and off-beaten track,\u201d said Smith. \u201cYou take the things where everybody just throws out everything and says, \u2018we hate it and we are all chasing some other fad.\u2019 And you\u2019re just like, \u2018wow, there\u2019s plenty of things that the market is ignoring.\u2019\u201d<\/p>\n
Some of the other investors with links to Param\u00e9s:<\/p>\n
Alvaro Guzm\u00e1n de L\u00e1zaro, Fernando Bernad. They worked with Param\u00e9s at Bestinver, later co-founding Azvalor Asset Management, where their Azvalor Internacional fund has returned 22% annually over five years, beating 97% of peers.
\nAndr\u00e9s Allende. He worked at Cobas before joining A&G Global Investors. His Paradigma Value Catalyst Equity fund has returned 20% annually over the past three years.
\nIv\u00e1n Mart\u00edn. Co-founded Magallanes Value Investors\u00a0with Blanca Hern\u00e1ndez, a long-time investor with Param\u00e9s when he was at Bestinver. Mart\u00edn\u2019s Magallanes European Equity fund is beating 87% of peers over five years.<\/p>\n
Mart\u00edn, who has travelled to Omaha, Nebraska, with Param\u00e9s for the Berkshire Hathaway Inc annual meeting, credits Param\u00e9s with reshaping Spain\u2019s asset management industry.<\/p>\n
\u201cValue is a way of living, it\u2019s intrinsic to who you are,\u201d Martin said. \u201cIt\u2019s about investing for the long term, being very disciplined.\u2019\u2019<\/p>\n<\/p>\n
Still, it\u2019s been a tough time to be a value investor. While Cobas Internacional is up 21% this year, putting it in the 95th\u00a0percentile of funds, all that many investors want to talk about is the wild moves in tech stocks, with an index of semiconductor shares up more than 50% even after a selloff in recent days.<\/p>\n
Many value investors have struggled to stay relevant against growth funds, and have seen their funds shrink. Managers who follow the strategy oversee about 7.5% of equity assets, according to Morningstar. It\u2019s down from 13% when the firm began tracking the data in 2008.<\/p>\n
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Read: Semiconductor giants are powering the AI revolution<\/p>\n
It\u2019s part of the reason why Madrid\u2019s value crew is\u00a0relatively unknown, and assets under management are still modest, compared with other star managers.<\/p>\n
Others say the small size allows the funds to stay nimble, making it easier to take a concentrated position and then exit it without fear of moving the market.<\/p>\n
And at a time when investors are worried that the AI frenzy has created a bubble, one that\u2019s beginning to lose altitude, value funds may look like an attractive alternative.<\/p>\n
To Antonio Hidalgo, options professor at LWS Academy, it\u2019s unusual to find a group of investors so willing to ignore the big US tech stocks owned by everyone else.<\/p>\n
Read\/Listen: Tech bubbles, AI, and emerging markets<\/p>\n
\u201cWhat makes them particularly interesting is the contrast with Spain\u2019s broader level of financial education,\u201d he said. \u201cTo use an analogy, it\u2019s as if a country with no football tradition kept producing world-class footballers year after year.\u201d<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Buffett #followers #score #rare #win #investing #Spain<\/p>\n","protected":false},"excerpt":{"rendered":"
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