Super Investor #33 in our series is Francisco García Paramés – the ‘Warren Buffett of Europe.’ A deep-value investor focusing on Spanish and European markets, Paramés is one of the most respected names in long-term investing. His disciplined approach to value investing has led to exceptional returns, often compared to legendary figures like Warren Buffett and Seth Klarman.
In this article, we will explore Francisco García Paramés investment philosophy, key investments, and lessons for individual investors. Whether you’re new to value investing or a seasoned investor, understanding Paramés’ approach can offer valuable insights into successful buy-and-hold strategies.
Francisco García Paramés: Early Life and Background
Influences & Education
Francisco García Paramés was born in Spain in 1963 and studied Economics and Business Administration at the Complutense University of Madrid. Unlike many renowned investors, Paramés did not come from a finance-heavy background. However, during his early career, he was deeply influenced by the teachings of Benjamin Graham and Warren Buffett, shaping his core value investing principles.
Paramés credits David Dodd and Benjamin Graham, the pioneers of value investing, as his biggest inspirations. Their book, Security Analysis, laid the foundation for his investment philosophy. (Read more about David Dodd’s impact on investing here.)
Career Beginnings
Paramés joined Bestinver Asset Management in 1989, a Spanish investment firm that would serve as his professional home for nearly 25 years. It was here that he honed his value investing strategy, managing the firm’s funds with a long-term, fundamentals-driven approach.
Despite operating in European markets, his methods closely resembled those of Warren Buffett. He looked for undervalued companies with strong balance sheets, predictable cash flows, and durable competitive advantages—qualities that define classic value investing.
Investment Philosophy & Strategy of Francisco García Paramés
Core Principles of Francisco García Paramés
- Deep Value Investing – Buying stocks trading at significant discounts to their intrinsic value.
- Long-Term Focus – Holding investments for years, allowing compounding to work.
- Independent Thinking – Ignoring short-term noise and market trends.
- European Market Focus – Investing primarily in Spain and other European countries.
- Low Turnover – Minimal buying and selling to maximize long-term returns.
Investment Approach
Paramés applies bottom-up stock selection, meaning he focuses on individual companies rather than broader macroeconomic trends. His research process involves:
- Analyzing Financial Statements – Looking for strong earnings, free cash flow, and low debt.
- Assessing Competitive Advantages – Identifying companies with durable moats.
- Patience and Discipline – Avoiding speculative stocks and high-growth hype.
- Investing in Family-Owned Businesses – Many of his top holdings are family-run companies, as he believes they tend to be more stable and conservatively managed.
Francisco García Paramés: Notable Investments & Track Record
Key Investments
Paramés built his reputation by achieving stellar returns at Bestinver, outperforming European benchmarks for decades. Some of his most successful investments include:
- Grifols S.A. (GRF.MC) – A Spanish pharmaceutical company specializing in blood plasma products.
- Ferrovial (FER.MC) – A multinational infrastructure operator involved in airports and toll roads.
- Inditex (ITX.MC) – The parent company of Zara, one of the world’s largest fashion retailers.
These investments share strong fundamentals, competitive advantages, and consistent profitability, aligning with his deep value investing philosophy.
Performance Overview
During his tenure at Bestinver (1989–2014), Paramés achieved an annualized return of over 15%, significantly beating the Spanish IBEX 35 index and broader European indices. This outstanding track record earned him the nickname “the Warren Buffett of Europe.”
Francisco García Paramés Lessons for Individual Investors
Key Takeaways from Francisco García Paramés
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Invest with a Long-Term Mindset
- Don’t chase short-term gains. Instead, focus on quality businesses that compound over time.
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Buy Undervalued, High-Quality Stocks
- Look for stocks trading below intrinsic value with strong financials and competitive advantages.
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Ignore Market Noise
- Paramés emphasizes that short-term volatility is irrelevant. What matters is a company’s long-term earning power.
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Hold for the Long Haul
- Similar to Warren Buffett and Peter Lynch, Paramés believes in buying great companies and holding them indefinitely. (Learn more about Peter Lynch’s investment strategy here.)
Challenges & Criticism of Francisco García Paramés
Difficulties Faced
In 2014, after 25 years at Bestinver, Paramés left the firm due to management disagreements. His departure caused a stir in the Spanish investing world, as many investors had trusted Bestinver solely because of his expertise.
In 2016, he launched his own firm, Cobas Asset Management, continuing his value investing philosophy. However, European markets have struggled in recent years, making it challenging for his funds to replicate his previous success.
Criticism
- Some critics argue that value investing in Europe is less effective than in the U.S., where companies have stronger growth prospects. Read more from the Financial Times.
- Others believe his heavy concentration in Spanish stocks limits diversification.
Despite this, his long-term performance remains impressive, reinforcing the power of value investing.
Legacy & Influence of Francisco García Paramés
Impact on Investing
Francisco García Paramés has played a crucial role in popularizing value investing in Europe. His teachings and disciplined approach continue to inspire investors worldwide.Books & Educational Contributions
In 2017, he published “Investing for the Long Term“, a book outlining his investment principles and experiences. It serves as a valuable resource for anyone interested in buy-and-hold investing.
(For more on value investing, check out this article on Seth Klarman, the master of margin of safety: here.)
Francisco García Paramés Quotes & Wisdom
One of Paramés’ most famous quotes:
“Stock prices may fluctuate, but the intrinsic value of great businesses grows over time. The patient investor is always rewarded.”
Core Investing Wisdom
- “Buy great companies when they are cheap, and hold them forever.”
- “The best investments are made when others are fearful.” (A principle shared by Warren Buffett read more here.)
Conclusion: Why Francisco García Paramés is a Super Investor
Francisco García Paramés has proven that value investing transcends borders. By applying the principles of Warren Buffett and Benjamin Graham to European markets, he has built a remarkable career with exceptional returns.
For buy-and-hold investors, his strategy reinforces the importance of patience, independent thinking, and fundamental analysis. By following his approach, everyday investors can build wealth over time.
Happy Investing!