The 12 principles of value investing (Part 2)

As I mentioned last week the principles are based on ideas large investment managers such as Peter Lynch, Warren Buffett, Mario Gabelli, Charlie Munger, John Templeton, John Neff, Jim Rogers, Christopher H. Browne, Friedrich A. Von Hayek, Walter Schloss, Benjamin Graham and Francisco Garcia Paramés himself. These principles are contained in a book edited by Bestinver funds and summarized weekly by people.
Here we go with the following six principles:
7) Having a bad short-term behavior is inevitable: John Neff (1931) once said that "it is not always easy to invest in what is popular, but it is the way to get outstanding returns." Thus, less popular investments can generate short-term returns ill to stand in longer periods of tiempo.Por Therefore, choosing an investment manager for their results in the short term (less than 3 years) may lead to making the wrong decision, as the short-term outcome is not a good indicator of successful long. A study of Brandes on global equity funds reveals that, while the 7 best fund managers significantly beat the market over a period of 10 years, all had a worse performance than the benchmark for short periods of time.
8) It's not worth guided by economic forecasts: The co-founder of Quantum Fund Jim Rogers (1942) stated that "to be successful investing is necessary to go soon, when things are cheap, when there is panic, when everyone is demoralized ". Investors tend to follow the macroeconomic forecasts when investing, but the correlation between the stock market and the economy is much weaker than it may seem. So it's much more productive to devote every effort to the analysis of companies. It is also important to remember that economic forecasting is a very complicated task where mistakes outnumber the successes. The predictions of the analysts on the quarterly results of companies, according to a study by David Dreman, was erroneous in 75% of the time up to 10% on the quarterly results. Therefore not worth spending time and energy to the analysis of short-term variables totally uncontrollable as GDP, interest rates, the level of stock market indices or the company's quarterly results.
9) Do not invest in companies never overrated: One of the worst decisions of long-term investment is to buy shares overvalued because euphoria fashion sector or stock, as happened with Japan in the 90s, in which the country experienced the greatest speculative bubble twentieth century, when the real estate value was multiplied by 75 and the value of the stock by 100. The most dramatic case is that of the Nasdaq market that slumped 80% in less than three years, dragging millions of investors lose 99% of your investment. Many of these investors will take decades to recover your investment or just not ever recover. The most recent overvaluation has been in China's stock market, the index traded as at 40 times profit.
10) Do not let emotions guide your investment decisions: Benjamin Graham (1894-1976), economist and investor and pioneer of value investing, once said that "getting good returns is easier than people think. Get outstanding performance is much harder than people imagine. " And all because among the greatest challenges of a power inverter is staying true to its investment philosophy, never letting emotions dictate your decisions. And they usually do at the worst time, ignoring the famous board Buffet: "Be fearful when others are greedy and become greedy when everyone is afraid." In this sense, the statistics are revealing: in the last 20 years, the average profit of American funds in the stock market and 11.6%, however, the average profit Inverter U.S. equity funds is as only 4.5%. One of the most paradoxical is the famous Magellan Fund Peter Lynch, whose investors earned on average 5% annualized when performance that had the fund over 14 years was 29 % per year.
The causes of "self-destructive behavior" of the investor are many: to be guided by fear or ambition, invest in the fashion or not stay true to his philosophy. But above all highlights the general trend is the investor to try to predict the short term movement of the stock.
11) Do not try to predict the movement of the stock in the short term: According to the legendary American investor Walter Schloss (1916), "shyness generated by past failures causes most investors lost major bull markets." As described by Peter Lynch in his book "One Up on Wall Street", in late 1972, when the stock was about to suffer one of the worst crashes in history, optimism was at its highest point (85% of advisors were bullish as reported by Investor's Intelligence). At the beginning of the market rebound in 1974, 65% of advisors feared that the worst was yet to come. Again, before the fall of the stock market in 1977, 90% of advisors were bullish. At the start of big climb which took the market in 1982, more than half of the advisers predicted downs and just before the crash of 1987, 80% thought that the market would continue to rise. Lynch perfectly illustrates how difficult it is to predict the movement of stock markets.
Although long-term performance of any stock market approaches a constant 10%, yields on short-term stock market are asymmetric. A common tendency is to give investors their investment plan out of the market in the hope of re-entry when the environment is more favorable.
12) Patience is the main virtue of the successful investor: And, according to Francisco Garcia Paramés, investment director Bestinver AM, "the most fascinating of value investing is that time always works in your favor." Active Stocks are ideal for long-term get rich. Xigen But quality and less common among investors: patience. To achieve satisfactory performance in the stock market you need to have enough stamina to stay invested, sometimes even uncomfortable. Keep in mind that the U.S. stock market has provided positive returns to 5 years in 97% of cases. The market rewards the patient investor who stays true to their investment strategy, said in Bestinver. The Value Investing depends more on common sense, daily work and patience that individual sources of information or the prediction of future events. Its correct application minimizes the possibility of permanent losses in the portfolio and has produced positive results in the long run, beating the average market returns.
And this concludes the summary of the principles of value investing. This Saturday we are in 7th Rankia meeting where I am available to you all.
A greeting.

The U.S. economy grew 2.4% in the first quarter

Washington, May 30 (Thomson Financial). - The U.S. economy grew at an annual rate of 2.4% in the first quarter, a tenth less than originally planned, as a result of public spending cuts approved by Congress, especially on defense. However, Commerce Department data released today highlight that consumer spending rebounded in the first three months of the year at a rate of 3.4%, the highest in the past two years. The data is particularly significant in an economy like the U.S., where private consumption accounts for almost 70% of the total Gross Domestic Product (GDP). In its first estimate, the federal agency had estimated GDP growth at 2.5% for the period between January and February. In this way, the U.S. economy recorded over two years of sustained growth, despite its still palpable warmth accelerates its expansion over the last quarter of 2012, when it expanded 0.4%. The U.S. trade balance data also showed positive, with an increase in exports of goods and services by 0.8% compared with a fall of 2.8% reported for the fourth quarter of 2012, and imports which grew by only 1.9 % compared with a decrease of 4.2% in the previous period. Also, the real estate sector seems to consolidate its recovery from the 2008 crisis, and residential fixed investment grew at a rate of 12.1%. As a brake on economic growth, in contrast, behaved steep spending cuts amounting to 85,000 million approved last March to the end of the fiscal year in September 2013. Government spending fell 4.9% compared to 4.1% forecast in the first of three official estimates, with special emphasis on the defense sector which fell by 12.1%, compared with 11, estimated 5% previously. Without these cuts, the U.S. economic growth would have been 3.4% in the quarter. Meanwhile, prices remained controlled behavior, registering a growth of 1% in the annual adjusted, down from 1.6% at the end of last year, let alone the 2% threshold marked by the Federal Reserve ( Fed) U.S.. Although the data show some optimism about the U.S. economic discourse, the truth is that it is too weak to continue lowering the high unemployment rate in the country, which remains a major concern of citizens and which closed April in a 7.5%. In a parallel data released today, the figure weekly esempleo subsidy claims in the U.S. rose by 10,000 and stood at 354,000 last week. Experts valued the good performance of the economy in the context of sharp cuts in public spending, but said that is unlikely to affect the aggressive monetary stimulus policy implemented by the Fed to stimulate growth. In a recent appearance before the Joint Economic Committee of Congress, the Fed chairman, Ben Bernanke, stated that the policy stimulus including interest rates between 0% and 0.25% and monthly program billionaire bond buying is changed unless finding an economic expansion "continuous and sustainable." The third and final data on U.S. GDP will be released on June 26. MarketWatch

Washington, May 30 (Thomson Financial). - The U.S. economy grew at an annual rate of 2.4% in the first quarter, a tenth less than originally planned, as a result of public spending cuts approved by Congress, especially on defense. However, Commerce Department data released today highlight that consumer spending rebounded in the first three months of the year at a rate of 3.4%, the highest in the past two years. The data is particularly significant in an economy like the U.S., where private consumption accounts for almost 70% of the total Gross Domestic Product (GDP). In its first estimate, the federal agency had estimated GDP growth at 2.5% for the period between January and February. In this way, the U.S. economy recorded over two years of sustained growth, despite its still palpable warmth accelerates its expansion over the last quarter of 2012, when it expanded 0.4%. The U.S. trade balance data also showed positive, with an increase in exports of goods and services by 0.8% compared with a fall of 2.8% reported for the fourth quarter of 2012, and imports which grew by only 1.9 % compared with a decrease of 4.2% in the previous period. Also, the real estate sector seems to consolidate its recovery from the 2008 crisis, and residential fixed investment grew at a rate of 12.1%. As a brake on economic growth, in contrast, behaved steep spending cuts amounting to 85,000 million approved last March to the end of the fiscal year in September 2013. Government spending fell 4.9% compared to 4.1% forecast in the first of three official estimates, with special emphasis on the defense sector which fell by 12.1%, compared with 11, estimated 5% previously. Without these cuts, the U.S. economic growth would have been 3.4% in the quarter. Meanwhile, prices remained controlled behavior, registering a growth of 1% in the annual adjusted, down from 1.6% at the end of last year, let alone the 2% threshold marked by the Federal Reserve ( Fed) U.S.. Although the data show some optimism about the U.S. economic discourse, the truth is that it is too weak to continue lowering the high unemployment rate in the country, which remains a major concern of citizens and which closed April in a 7.5%. In a parallel data released today, the figure weekly esempleo subsidy claims in the U.S. rose by 10,000 and stood at 354,000 last week. Experts valued the good performance of the economy in the context of sharp cuts in public spending, but said that is unlikely to affect the aggressive monetary stimulus policy implemented by the Fed to stimulate growth. In a recent appearance before the Joint Economic Committee of Congress, the Fed chairman, Ben Bernanke, stated that the policy stimulus including interest rates between 0% and 0.25% and monthly program billionaire bond buying is changed unless finding an economic expansion "continuous and sustainable." The third and final data on U.S. GDP will be released on June 26. MarketWatch

The U.S. economy grew 2.4% in the first quarter - Expansion.com

Washington, May 30 (Thomson Financial). - The U.S. economy grew at an annual rate of 2.4% in the first quarter, a tenth less than originally planned, as a result of public spending cuts approved by Congress, especially on defense. However, Commerce Department data released today highlight that consumer spending rebounded in the first three months of the year at a rate of 3.4%, the highest in the past two years. The data is particularly significant in an economy like the U.S., where private consumption accounts for almost 70% of the total Gross Domestic Product (GDP). In its first estimate, the federal agency had estimated GDP growth at 2.5% for the period between January and February. In this way, the U.S. economy recorded over two years of sustained growth, despite its still palpable warmth accelerates its expansion over the last quarter of 2012, when it expanded 0.4%. The U.S. trade balance data also showed positive, with an increase in exports of goods and services by 0.8% compared with a fall of 2.8% reported for the fourth quarter of 2012, and imports which grew by only 1.9 % compared with a decrease of 4.2% in the previous period. Also, the real estate sector seems to consolidate its recovery from the 2008 crisis, and residential fixed investment grew at a rate of 12.1%. As a brake on economic growth, in contrast, behaved steep spending cuts amounting to 85,000 million approved last March to the end of the fiscal year in September 2013. Government spending fell 4.9% compared to 4.1% forecast in the first of three official estimates, with special emphasis on the defense sector which fell by 12.1%, compared with 11, estimated 5% previously. Without these cuts, the U.S. economic growth would have been 3.4% in the quarter. Meanwhile, prices remained controlled behavior, registering a growth of 1% in the annual adjusted, down from 1.6% at the end of last year, let alone the 2% threshold marked by the Federal Reserve ( Fed) U.S.. Although the data show some optimism about the U.S. economic discourse, the truth is that it is too weak to continue lowering the high unemployment rate in the country, which remains a major concern of citizens and which closed April in a 7.5%. In a parallel data released today, the figure weekly esempleo subsidy claims in the U.S. rose by 10,000 and stood at 354,000 last week. Experts valued the good performance of the economy in the context of sharp cuts in public spending, but said that is unlikely to affect the aggressive monetary stimulus policy implemented by the Fed to stimulate growth. In a recent appearance before the Joint Economic Committee of Congress, the Fed chairman, Ben Bernanke, stated that the policy stimulus including interest rates between 0% and 0.25% and monthly program billionaire bond buying is changed unless finding an economic expansion "continuous and sustainable." The third and final data on U.S. GDP will be released on June 26. MarketWatch

The U.S. economy grew 2.4% in the first quarter - Expansion.com

Washington, May 30 (Thomson Financial). - The U.S. economy grew at an annual rate of 2.4% in the first quarter, a tenth less than originally planned, as a result of public spending cuts approved by Congress, especially on defense. However, Commerce Department data released today highlight that consumer spending rebounded in the first three months of the year at a rate of 3.4%, the highest in the past two years. The data is particularly significant in an economy like the U.S., where private consumption accounts for almost 70% of the total Gross Domestic Product (GDP). In its first estimate, the federal agency had estimated GDP growth at 2.5% for the period between January and February. In this way, the U.S. economy recorded over two years of sustained growth, despite its still palpable warmth accelerates its expansion over the last quarter of 2012, when it expanded 0.4%. The U.S. trade balance data also showed positive, with an increase in exports of goods and services by 0.8% compared with a fall of 2.8% reported for the fourth quarter of 2012, and imports which grew by only 1.9 % compared with a decrease of 4.2% in the previous period. Also, the real estate sector seems to consolidate its recovery from the 2008 crisis, and residential fixed investment grew at a rate of 12.1%. As a brake on economic growth, in contrast, behaved steep spending cuts amounting to 85,000 million approved last March to the end of the fiscal year in September 2013. Government spending fell 4.9% compared to 4.1% forecast in the first of three official estimates, with special emphasis on the defense sector which fell by 12.1%, compared with 11, estimated 5% previously. Without these cuts, the U.S. economic growth would have been 3.4% in the quarter. Meanwhile, prices remained controlled behavior, registering a growth of 1% in the annual adjusted, down from 1.6% at the end of last year, let alone the 2% threshold marked by the Federal Reserve ( Fed) U.S.. Although the data show some optimism about the U.S. economic discourse, the truth is that it is too weak to continue lowering the high unemployment rate in the country, which remains a major concern of citizens and which closed April in a 7.5%. In a parallel data released today, the figure weekly esempleo subsidy claims in the U.S. rose by 10,000 and stood at 354,000 last week. Experts valued the good performance of the economy in the context of sharp cuts in public spending, but said that is unlikely to affect the aggressive monetary stimulus policy implemented by the Fed to stimulate growth. In a recent appearance before the Joint Economic Committee of Congress, the Fed chairman, Ben Bernanke, stated that the policy stimulus including interest rates between 0% and 0.25% and monthly program billionaire bond buying is changed unless finding an economic expansion "continuous and sustainable." The third and final data on U.S. GDP will be released on June 26. MarketWatch

The U.S. economy grew 2.4% in the first quarter - Expansion.com

How the International Monetary Fund work

To get in history, the International Monetary Fund was created in 1945 in the United States, and its main objectives are to promote international monetary cooperation, facilitate international trade, and reduce, ultimately, poverty. It also conducts economic policies international regulatory and conciliatory. It is part of the United Nations being an intergovernmental organization made up of 187 members. Headquartered in Washington DC, but has several offices around the world.

IMF Performance

• The main objective of the International Monetary Fund is to ensure the stability of the international monetary system that allows member countries, and therefore its citizens transact with each other, which makes maintaining a stable financial system, sustainable and balanced.
• For this, the International Monetary Fund provides funding to member countries to improve the margin of maneuver of each country in relation to its balance of payments. Between national authorities and the International Monetary Fund made an action plan, ensuring effective both for its compliance.
• It also provides technical support and does a great job as a consultant to member countries to develop effective economic policies, for example on tax administration, monetary and exchange rate policy, supervision and regulation of banking systems and the regulations governing them.

IMF Resources

• Currently, the countries to become members of the International Monetary Fund, quotas must deposit called "subscription fees", which are directly related to the economic capacity of the country.
• These assessments determine the economic aid that the Fund will provide each country as well as their right to vote in decisions about regulations. Thus, the higher the contribution of a country, the more power on joint decisions and have more financial aid when tackling a crisis.
• When a country needs financial aid, IMF gives 25% of its shares, with the country's commitment to return within a period ranging from 3 to 5 years. It is expected that the country must repay the loan as soon as possible to not leave without credit to other member countries.
• In the past, obtaining resources from the International Monetary Fund was made by obtaining the interest on loans outstanding, which made it less effective and solvent, then opting for the model that is currently running .

What are the criteria of banks to lend

Unlike what banks and preach the good credit history of a customer is the most important when lending to this, but taking into account factors that are related to the ability to repay the loan voluntarily or necessity, and that should be very clear.

The ability to pay

The business of a credit institution not sue their debtors and keep their property in the event of default, which also usually results in losses, but to collect the amount borrowed and the interest and fees on time.
For this reason, the main criterion for granting loans is that the applicant can meet the periodic installments. Generally, in the case of mortgages, the monthly fee should not exceed 35% of the borrower's monthly income and your household.
If it is a loan in the medium or long term, banks and fixing the type of employment contract that the customer has, in addition to the strength of the employer. If this does not convince them, may require hiring a payment protection insurance, for example.

The warranty

Second, to ensure that in case of default can recover the borrowed capital and interest, the guarantee granted is very important. If it comes to purchasing a home, precisely the mortgage on the property is essential because the loan shall not exceed 80% of the valuation of this.
In other cases, especially whether to grant loans for amounts higher or long periods, you may require the financial institution, for example, the guarantor, that is, someone other than the client is committed to your estate to pay the debt if it does not comply.
It is also usual for the agency credit loans is fixed in current assets of the applicant, that is, both money and other personal property such as stocks or jewelry that may eventually be left with the first, as a garment, and use it to collect the debt.

How to negotiate with the bank's best interest rate

If getting a loan is in itself complicated, get a good interest rate may seem impossible. However, if you follow certain trading strategies, the results will be more profitable than those which have been finalized to not use them.Trading ResourcesTo get a good interest rate is necessary to have two tools that support robust negotiation otherwise the lender will not even bother to raise a possible downgrade. It is important to feel in a position strong enough to require a modification of the standard conditions.
The first of them is to have a good credit history and be customer for several years. In this case the bank does not lose the customer interested and can offer good rates, in fact, experience shows that once a borrower has a loan with an institution, the tendency is to take it both accounts as the other products .
Additionally, it is critical information in advance, asking for contributions to various lending institutions, preferably in writing, about the interest rate they offer. Only in this way you can tell if the rate you are offering the bank concerned is outside of the standard in the market and if it is reasonable to request a rebate.LinkagesOne of the mechanisms currently used by lending institutions to lower the normal interest rate is called bonding, which is to ask the client to hire some additional products and maintain during the term of repayment of the loan.
Within these there is the payroll debit and utility bills, such as electricity, water, telephone and gas contracting life insurance and payment protection, hiring credit cards, and plans pensions and savings.
It is important to analyze how many basis points interest rate cut each product and determining whether compensated hire and if you are able to keep. In the case of savings funds, for example, the borrower is obliged to make monthly contributions.