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Book Description

Make the smartest choices you can with this must-have read for investors by one of the world's legendary value investors

World-renowned investor Francisco García Paramés shares his advice and tips on making smart investments in this must-have book for those looking to make smarter choices for their portfolio. Investing for the Long Term is divided in two parts. The first is formed by three chapters covering Francisco's education and first steps, his initial experience as an investor working alone, and the team work after 2003. This riveting section covers the end of the biggest bull market of the 20th century and the technological and financial crashes of 2000 and 2008. How the team dealt with all that is an interesting personal account that can help you deal with similar situations, should they occur.

The second part of the book covers the cornerstones of Francisco's philosophy. It starts with a chapter in Austrian economics, in his view the only sensible approach to economics, which has helped him enormously over the years. It follows with an explanation of why one has to invest in real assets, and specifically in shares, to maintain the purchasing power of ones savings, avoiding paper money (fixed income) at all costs. The rest of the book shows how to invest in shares.

  • Discover the amazing investing principles of one of the most successfully fund managers in the world
  • Examine how one man and his company weathered the two of modern times’ biggest economic crashes
  • Learn how to safely invest your savings

Value investing and effective stock-picking underlie some of the world's most successful investment strategies, which is why Investing for the Long Term is a must-have read for all investors, young and old, who wish to improve their stock selection abilities.

Table of Contents

  1. Cover
  2. Foreword
  3. Introduction
    1. NOTES
  4. PART One: The Backstory
    1. CHAPTER 1: A Bit About My Early Years
      1. ORIGINS
      2. UNIVERSITY
      3. FIRST JOBS
      4. IESE
      5. BESTINVER
      6. MY INITIAL ANALYSIS AND INVESTMENTS
      7. NOTE
    2. CHAPTER 2: Going Solo (1991–2002)
      1. 1991–1998: I START INVESTING. BULL MARKET
      2. 1993–1994: UP AND DOWN (OR UP AND AWAY...)
      3. 1995–1997: EUPHORIA RUNS WILD
      4. 1998: THE END OF THE CYCLE
      5. SHADOW REPORT ON ENDESA AND ITS SUBSIDIARIES
      6. ACTIVISM
      7. END OF THE CYCLE
      8. 1998–2002: DOWNSWING. GLOBAL PORTFOLIO
      9. 1999: THE LOW POINT
      10. 2000–2002: BACK TO NORMALITY
      11. MY ENCOUNTER WITH HAYEK
      12. THE FINAL TAKE-OFF: 2000–2002
      13. NOTES
    3. CHAPTER 3: Investing as a Team (2003–2014)
      1. 2003: A NEW MANAGER
      2. BULL MARKET: BUBBLES
      3. 2004–2005: THE REAL-ESTATE BOOM IN FULL SWING
      4. GOING SHORT
      5. GLOBAL PORTFOLIO
      6. 2006–2007: ON THE BRINK..
      7. 2007
      8. 2008: THE BIG FALL
      9. LIQUIDITY
      10. 2008: CONTINUATION
      11. THE FINANCIAL CRISIS
      12. CIBA: SALVATION AT THE DARKEST HOUR
      13. 2009: IMMEDIATE RECOVERY
      14. THE QUALITY OF COMPANIES
      15. 2010–2012: EUROPEAN AND SPANISH CRISIS
      16. 2013–2014: OVER AND OUT
      17. APPENDIX
      18. NOTES
  5. PART Two: Theory: The Underpinnings of Investment
    1. CHAPTER 4: The Austrian School of Economics
      1. BRIEF HISTORY OF THE AUSTRIAN SCHOOL
      2. MAIN TENETS OF THE AUSTRIAN SCHOOL
      3. APPLICATIONS TO INVESTMENT
      4. CONCLUSION: SUBJECTIVISM AND OBJECTIVE PRICE
      5. NOTES
    2. CHAPTER 5: Investment
      1. SAVING AND INVESTMENT
      2. REAL OR MONETARY INVESTMENT
      3. WHICH TYPE OF ASSET IS MORE ATTRACTIVE, OFFERING HIGHER RETURNS OVER THE LONG RUN?
      4. HISTORIC EVIDENCE
      5. VOLATILITY (NOT RISK)
      6. WHAT IS RISK?
      7. WHY DO EQUITIES OFFER BOTH GREATER RETURNS AND LESS LONG-TERM RISK?
      8. MORE ON THE POLITICAL PROBLEM
      9. CONCLUSION
      10. APPENDIX A
      11. APPENDIX B
      12. NOTES
    3. CHAPTER 6: Passive and/or Active Management
      1. PASSIVE MANAGEMENT
      2. ACTIVE MANAGEMENT
      3. CONCLUSION
      4. APPENDIX
      5. NOTES
    4. CHAPTER 7: Investing in Stocks (I): Foundations and Principles
      1. FOUNDATIONS AND EXPERIENCE
      2. SETTLING ON QUALITY
      3. COMPETITIVE ADVANTAGES
      4. THE POSSIBILITY OF REINVESTING
      5. NOTES
    5. CHAPTER 8: Investing in Stocks (II): Opportunities, Valuation, Management
      1. FINDING THE RIGHT OPPORTUNITY
      2. COMPANIES TO AVOID
      3. CAPITAL ALLOCATION
      4. VALUATION
      5. NORMALISED EARNINGS
      6. INDEBTEDNESS
      7. MARKET RECOGNITION
      8. THE PERFECT STOCK
      9. PORTFOLIO MANAGEMENT
      10. NOTES
    6. CHAPTER 9: The Irrational Investor Lurking Within Us All
      1. WHY DON'T WE INVEST IN EQUITIES? AVERSION TO VOLATILITY
      2. WHY DON'T WE INVEST USING PROVEN STRATEGIES, OR AT LEAST IN CHEAP STOCKS?
      3. THE ENDOWMENT EFFECT
      4. TENDENCY TO CONFIRM WHAT WE ALREADY KNOW
      5. THE INSTITUTIONS
      6. INFORMATION OVERLOAD AND OTHER PROBLEMS
      7. CONCLUSION
      8. NOTES
  6. Conclusions and Future
    1. ASSET MANAGEMENT
    2. MY OWN FUTURE
  7. APPENDIX I: 26 Small Ideas and One Guiding Principle
  8. APPENDIX II: Reading Material and Wealth Creation
  9. References
  10. Further Reading
  11. Index
  12. End User License Agreement