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Caiman Valores

 
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  • BBVA: An Unloved And Undervalued Spanish Global Banking Giant, Part 3 - Key Risks, Shareholder Remuneration, And Valuation [View article]
    Elliott that is a very hackneyed theory that has been circulating in the world of investment management and advising for sometime in fact for longer than my career.

    I think you are confusing the purpose of analysis of individual investments, which includes assessing their quality, potential returns and risks with the theory of portfolio construction. While they both go hand in hand they are distinctly different processes with different desired outcomes. Asset allocation is primarily a risk management tool and not the sole means of selecting individual investments. Furthermore, asset allocation will depend on the purpose of the investment, the desired rate of return and the degree of risk mandated for the investment. Essentially though this is a portfolio construction tool and it is mainly relevant to less sophisticated investors and managed investment schemes, where you are attempting to maximize returns while managing risk.

    I would also posit that if your argument is correct then any actively managed investment and in particular the theory of 'value investing' is a waste of time and investors should stick solely to investing in indexes, which is a school of investment thinking in itself and most popularly supported by Vanguard. However, I do not believe that managed investments provide any utility for investors and are the domain of the unsophisticated investor or the time poor professional, rather than sophisticated trader or investor.

    With regard to your theory of looking for countries for investment, forms part of the top down investment methodology. This is where you look for opportunities based on macro indicators and analysis, to identify geographic regions, industries and sectors that have the potential to outperform. Then after applying that overlay you then undertake a fundamental analysis of the stocks that meet the criteria set as I have done with BBVA in this article.
    Oct 28 09:21 PM | 1 Like Like |Link to Comment
  • BBVA: An Unloved And Undervalued Spanish Global Banking Giant, Part 3 - Key Risks, Shareholder Remuneration, And Valuation [View article]
    Elliott you have raised a number of interesting issues in your comment and response please see the points below.

    1. Insider information permeates the entire investment industry and has spawned a school of investing where traders and investors exclusively invest on the basis of insider trades.

    2. Insider information does influence both ratings and trading activity despite its use being illegal (hence the offence of insider trading and other various market manipulation offences) but it is not as widely spread as generally believed.

    If it were the stock market would be an extremely inefficient mechanism for pricing the fair value of a company and ultimately there would be no place for investment analysts or sites such as Seeking Alpha. Investors would then be better taking a dart board approach as it would appear that you do, or the smarter investors would take the approach in point one above.

    3. Investment/company/stock analysis is not the singular pervue of investment banks or major fund managers. There are a wide range of independent analytical businesses ranging from the boutique such as myself to large global businesses such as Morningstar.

    We all bring a different skill set and approach to the table and it is this variety that provides investors with the necessary tools and information to make an informed investment decision, which is probably the most important part of the investment process.

    4. At a minimum there are 35 major investment houses/brokers that monitor BBVA each with their own rating http://bit.ly/RpDYBO. These ratings range from sell to hold to buy.

    This certainly doesn't align with the argument that you have put forward that they are all reaching their findings based on the same 'insider' information, otherwise in the simplest sense all of their ratings would be the same. It is also clear from the number of different findings and outcomes that they are all using different analytical tools and methodologies.

    Both the volume of ratings and the number that conflict make it essential for investors to gather as much information as possible so as to make an informed decision. When this is considered in light of the conflicts of interest that exist for many of these organizations it is easy to see how important independent analysts such as myself are to investors.

    5. It would appear from your comment that you are taking the lazy critics approach to critiquing the article by denigrating the credentials of the author rather than presenting a contrary point of view and the necessary evidence to support it. In which case had you read my bio, you would have realized that I have extensive experience in the commercial banking, funds management and investment advisory combined with post-graduate qualifications in finance and commercial law (specifically banking law).

    This also comes with the ability to speak both English and Spanish, which gives me a unique edge over most analysts when analyzing a Spanish bank and extensive on the ground experience in Latin America, where BBVA has a large portion of its business. This I believe gives me a unique insight into BBVA and its operations that the majority of analysts and institutions to which you refer don't.

    In the case of this article I have applied that unique insight along with an indepth analysis of the bank, its asset quality, capital adequacy, liquidity and growth outlook. This has then been passed through a series of macro filters and assessed using my indepth hands on knowledge of commercial banks and the commercial banking industry along with my on the ground knowledge and experience in Latin America to form a view.
    Oct 27 07:32 PM | 1 Like Like |Link to Comment
  • BBVA: An Unloved And Undervalued Spanish Global Banking Giant, Part 3 - Key Risks, Shareholder Remuneration, And Valuation [View article]
    recarn thank you for the feedback. I believe that BBVA is superior to Santander and at this time represents an undervalued long-term value play for investors. Your use of the DRIP is certainly sound and it provides investors particularly retail investors with a good way in which to access the power of compounding their returns while also avoiding Spanish withholding tax.
    Oct 26 06:55 PM | Likes Like |Link to Comment
  • BBVA: An Unloved And Undervalued Spanish Global Banking Giant, Part 3 - Key Risks, Shareholder Remuneration, And Valuation [View article]
    Apologies to clarify I meant to say doesn´t operate or have a significant exposure.
    Oct 25 09:57 AM | Likes Like |Link to Comment
  • BBVA: An Unloved And Undervalued Spanish Global Banking Giant, Part 3 - Key Risks, Shareholder Remuneration, And Valuation [View article]
    Austinbroker thank you for the feedback. I like BBVA and Banco Santander and believe that both represent good value and income for long-term investors. My preference is BBVA because of its superior liquidity, higher asset quality along with its exposure to markets in which Santander doesn't operate including Colombia, Argentina and Venezuela.
    Oct 24 06:24 PM | Likes Like |Link to Comment
  • BBVA: An Unloved And Undervalued Spanish Global Banking Giant, Part 3 - Key Risks, Shareholder Remuneration, And Valuation [View article]
    Avidd thank you for the feedback. I took a relatively conservative view with regard to the valuations and obviously given the ongoing nature of the eurozone crisis it is likely that it will be sometime before a solid recovery is seen BBVA´s share price. But I believe that at its current value it is unfairly valued by the market and represents an opportunity for long-term investors.
    Oct 24 03:22 AM | Likes Like |Link to Comment
  • BBVA: An Unloved And Undervalued Spanish Global Banking Giant, Part 3 - Key Risks, Shareholder Remuneration, And Valuation [View article]
    Col again thank you for the feedback and please let me know when your ready to start work on some co-operative articles comparing some global and regional banks.

    Regards,

    CV
    Oct 24 03:19 AM | Likes Like |Link to Comment
  • BBVA: An Unloved And Undervalued Spanish Global Banking Giant, Part 1 - Asset Quality, Risk, And Liquidity [View article]
    GWBJ thank you for the additional information and insight, as always appreciated. 
    Oct 24 03:10 AM | Likes Like |Link to Comment
  • BBVA: An Unloved And Undervalued Spanish Global Banking Giant, Part 1 - Asset Quality, Risk, And Liquidity [View article]
    Labutes thank you for the feedback. Off the top of my head I couldn´t say but I will do some digging and let you know. Scotia Bank is a very well run institution with an impressive financial performance. But I do believe that the market has priced this into the stock. I am going to be doing a series of follow up articles looking at BBVA´s main competitors including Scotia Bank in the very near future.
    Oct 24 03:07 AM | Likes Like |Link to Comment
  • BBVA: An Unloved And Undervalued Spanish Global Banking Giant, Part 1 - Asset Quality, Risk, And Liquidity [View article]
    Elliott thank you for the feedback and the points that you have raised. I agree that Spain´s economy will get worse before it gets better, but I believe that BBVA along with Grupo Santander is currently unfairly valued by the market and because of both its geographic diversification along with exposure to a range of emerging and frontier markets that it presents as a good value investment opportunity for long-term investors. Particularly when its high asset quality, low to moderate exposure to the Spanish property development and construction sector and high levels of liquidity and capital adequacy are taken into account.
    Oct 24 03:05 AM | Likes Like |Link to Comment
  • BBVA: An Unloved And Undervalued Spanish Global Banking Giant, Part 1 - Asset Quality, Risk, And Liquidity [View article]
    OldWarrior thank you for the feedback. I have just returned from a trip away and will be responding to all of the comments today.

    Regards,

    CV
    Oct 24 03:01 AM | Likes Like |Link to Comment
  • BBVA: An Unloved And Undervalued Spanish Global Banking Giant, Part 1 - Asset Quality, Risk, And Liquidity [View article]
    Col thanks for the feedback, unfortunately had a few typos in parts 2 and 3, which I have only just attended to so that has delayed publication.
    Oct 16 04:02 PM | Likes Like |Link to Comment
  • Spain's Economic Turmoil Camouflages BBVA's True Potential [View article]
    Jarco thank you for the feedback. I am happy that my readers are obtaining value from not only the articles but also the comments and discussions that they generate. I quite appreciate the comments and also quite like to see discussion among readers as well. Ultimately the views expressed in my articles only reflect my interpretation of the company and surrounding evidence, so it is always good to be able to see another persons perspective and ideas on investment. Looking forward to more comments and discussions.
    Jul 11 11:56 AM | Likes Like |Link to Comment
  • Spain's Economic Turmoil Camouflages BBVA's True Potential [View article]
    John that is in an interesting point. My knowledge of U.S prudential regulations is not particularly strong but to clarify by assets I am referring to regulated assets including loans (asset) and deposits (liabilities) not other assets that the bank has accrued through its operations. My limited understanding is that while the bank's regulated assets and deposits can't be moved offshore to the parent, other assets acquired through the course of business, i.e purchased with profits can be streamed to the parent.
    In addition, it is the parent that provides the capital required to allow the sub to operate and remain solvent, as well as meeting prudential regulations including capital requirements. Therefore, if the parent becomes insolvent or for other reasons is unable to provide the required funds for its sub to meet its funding requirements then the sub is unable to operate.
    Jul 10 09:16 PM | Likes Like |Link to Comment
  • Spain's Economic Turmoil Camouflages BBVA's True Potential [View article]
    John that is correct prudential regulation in the U.S protects the deposits and the majority of the assets held by the bank from being shipped offshore in the event of its parent becoming insolvent. This applies to all subs of foreign banks operating in the U.S. It is designed to protect customers of those institutions but not investors.
    Jul 10 11:59 AM | Likes Like |Link to Comment
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