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Investing through Spanish Eyes: Looking for Super Value Stocks!

“Good things happen to those who wait.” — Francisco Parames

Money manager Francisco Garcia Parames (dark jacket) and I participate as speakers at the Mont Pelerin Society meetings.

Two weeks ago, I was in the Canary Islands, Spain, for the Mont Pelerin Society meetings. Members of the Mont Pelerin Society are political and economic experts who come together from around the world.

I’ve been attending the group’s meetings since I was invited by Milton Friedman in 1988 — 30 years ago. That gathering was in Tokyo, and I’ve been a member since 2002

At this meeting, I was on a panel with fund manager Francisco Garcia Parames, who the Financial Times calls the “Spanish Warren Buffett.” His money management company, Cobas Asset Management, is based in Madrid and has returned an average annualized gain of 16% over the past two decades.

Wiley published the fund manager’s book about his story and his investment philosophy, “Investing for the Long Term,” which is available through Amazon. I enjoyed reading it, especially how he overcame personal odds — for example, a Cobas fund achieved a 49% return in 2000-2002 in a market that lost 40%!

Parames is a classic value investor. His philosophy is similar to the one espoused by many famous money managers, including Sir John Templeton, Peter Lynch and Warren Buffett: Buy quality companies in expanding industries, and buy them when they are priced low.

J. Paul Getty said it best: “The big profits go to the intelligent, careful and patient investor, not to the restless and overeager speculator… The seasoned investor buys stocks when they are low, holds them for the long-pull rise and takes in between dips and slumps in his stride.” (Quoted in “The Maxims of Wall Street.”)

Where are the best value plays today?

Some value investors are looking at gold stocks. They are certainly cheap. But most aren’t making any money. Facing a strong dollar, the price of gold has been in a bear market since 2011.

Donald G. Smith, a veteran money manager based in New York and a regular speaker at my conference www.freedomfest.com, has been buying builder stocks lately. They include Toll Brothers (NYSE:TOL) and KB Homes (NYSE:KBH), which are selling at only six times earnings and at or below their book value. Both still are making money.

The builder stocks are down 35% from their highs of a year ago due to sharply higher mortgage rates of about 5% which are at their highest level in seven years. When rates stabilize, these stocks could skyrocket.

In the short term, home builder stocks could get cheaper. As Wendell Brock says, “Nothing can make the spirit fly higher than finding a bargain when you’re the buyer. And nothing can be the spirit sink deeper than finding it later a little bit cheaper.”

Good investing, AEIOU,

Upcoming Conferences

New Orleans Investment Conference, New Orleans Hilton, Nov. 1-3: This is the granddaddy of hard-money conventions. I’ll be there this year to speak on a controversial subject: “Investors, Beware! Why Gold Bugs and Austrian Economists Often Offer Bad Investment Advice.” They typically are right in theory, but their timing is off, and that can hurt your portfolio. Don’t miss other celebrity speakers including Mark Steyn, Jim Grant, Jonah Goldberg, Dennis Gartman, Rick Rule, Robert Kiyosaki and Brien Lundin. To register, call toll-free 1-800-648-8411.

Deadline is Fast Approaching on Cuba Cruise 2019

Cuba is hot as a destinationAll cabins aboard the five-star Oceania Insignia for our November 9-16, 2019, cruise (next year) have sold out EXCEPT ours. And we have to turn back any cabins not sold by the end of December. I urge you to sign up now before it’s too late. This week-long trip to Cuba is special — we will be given a private tour in Havana by a free-market economist who actually lives in Cuba and will show us parts of “communist-controlled” Havana that no one else sees. This cruise is not to be missed!

Greg Galloway and I will be speaking on investing. Dave Phillips, president of Estate Planning Specialists, will be talking about estate planning in response to the Trump tax cuts. I also will be giving a talk on the important economic and cultural differences between Latin America and North America.

Plus, my wife Jo Ann, an English professor, will speak on Ernest Hemingway and Cuba. This will be a small private conference with ample opportunity to interact with the speakers and attendees. We’ve already sold over 20 cabins.

Please call Nicole at the MoneyShow (which is organizing the cruise), toll-free at 1-844-225-5838 for a free color brochure, and make your deposit NOW. Cabins are available as low as $2,399 per person/double occupancy, and the price includes airfare from getaway cities, free WiFi and even a $400 shipboard credit. But you must act NOW if you want to join us.

Upcoming Appearances:

At the end of next week, Oct. 27, I will be speaking for the first time at the American Association of Individual Investors (AAII) national convention at the Paris Resort, in Las Vegas, on my book, “The Maxims of Wall Street: Bears Make Headlines, Bulls Make Money.” Over the years, I’ve spoken at a dozen local AAII meetings, and often have been voted their #1 speaker. Now, I finally have been invited to speak at their national convention. For more information, go to https://www.aaii.com/conference.

You Blew It!

Will the Trump Administration and Fox News Drop Out of the Saudi Investment Conference?

“Do you do business with a killer?” — Maria Bartiromo, Host, Fox Business News

Following the gruesome murder of American resident and Washington Post contributor Jamal Khashoggi at the Saudi consulate in Turkey on Oct. 2, major business leaders and media have dropped their participation in Saudi Arabia’s Future Investment conference, known as the “Davos of the Desert.”

Business leaders who now are opting to stay away include Jamie Dimon of JPMorgan, Bill Ford of Ford Motor Co. and International Monetary Fund (IMF) Chief Christine Lagarde. Media giants that are pulling out of the event so far include CNN, CNBC, Bloomberg, Nikkei, “The Economist” and “The Financial Times”.

Meanwhile, Trump’s Treasury Secretary Steve Mnuchin is still planning to speak, and so far the only major media outlet still planning to attend is Fox News, and host Maria Bartiromo, who was the emcee of the conference last year.

It is a sad commentary when the U.S. government does not stand up for human rights violations, no matter how important the economic and military connections are with another country.

Bartiromo, who frequently defends President Trump, also made a case for maintaining good relations with Saudi Arabia: “We do need them for stability in the region. We do need them to fight the terrorists out of Iran.”

But at what cost?

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