Saturday, June 25

One thing is luck in the stock market and another is the management of luck

It has always been said In the markets that there is nothing more funky than a million dollars. With what it costs to win it and how fast it can go. That’s why high-net-worth investors tend to look for “sure things” and prefer not to lose money rather than earn it. Until a crisis arrives in which many times they are liquid and it is time for their fortune to grow and put their cash to work.

It seems a lie to me that Spaniards now having almost 2 times the value of the stock market in liquidity, they have not wanted to enter through direct investment or mutual funds on the stock market. Opportunities like these do not occur every day and if you do not tell Jose Ramón Iturriaga, Okabango’s manager in cheap valuations with controlled risks, this is how he is now investing in banking, seeking the recovery of the next few years.

But It is one thing to be caught by the crisis with liquidity in the account and another to be able to manage the positions well and not invest in the first thing that comes along. Currently there are 300,000 million euros in deposits only in Spain, at negative rates and frying their owners to commissions in some cases due to the low profitability of the bank (the bank is paying the ECB for having those deposits) What a business!

And to make matters worse, inflation will exceed 5% at the end of the year if this trend continues, we are going that savers are going to lose money depositors in all ways.

Keep in mind one thingInvesting and being conservative does not mean that we are unambitiousWe have liquidity, but we must be aware of the moment in which we live, the new strains will not break the economy so much, but some sectors from which we must move away even though at these prices we consider them bargains. The reality of these new strains is that we realize that the war against the virus is not over and we are not winning it.. Possibly this strain is nothing, but nobody assures us that another is going to be a big problem as long as the rest of the world is not vaccinated.

Here’s an example, one of my favorite companies, Alibaba, quite a bargain, is trading at a lower price-to-earnings ratio since the IPO, when the company is selling much more than in the past.

But, Would we enter Alibaba at these prices? The answer is yes. But,would we enter Alibaba right now with China targeting its listed companies? Here the answer is no.

In general, we must enter sectors that the wind comes from behind, that have traction and without problems in the short term because not only do we have to go public, we must know how to manage the position and know how to exit, with profits or losses.

Look at the long-term potential of ibex 35 stocks, some of them over 50%, but is that investment for me? Am I willing to take the risk involved?

All of them are suffering from the pandemic and have potential if the pandemic disappears, but there are many intermediate scenarios. If you are lucky enough to have liquidity and want to invest, take positions little by little, 20-30% and wait … and then we see if we get on the car or better we look at another car.

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