Introducing Staying Rational

Stock picking with an Iberian focus

Staying Rational is an outlet for my thoughts and investment ideas.

I’ve been analysing companies for 10+ years. I started as a equity research analyst covering Iberian banks during the European sovereign crisis (2011-12). I’ve also worked as a rating analyst and as a credit officer. Needless to say these experiences were instrumental for my appreciation of downside protection (most Iberian banks lost >70% of their value over the last decade) while being exposed to the upside (“never waste a good crisis”). Nowadays I bring these perspectives together as a investor managing my own capital.

Yet another newsletter… why?

I believe there is a niche that is interested in boring predictable companies… I will mostly analyse companies that are from the old economy and without much hype. But to my eyes they are quite interesting either because these companies are too cheap to ignore or because the market doesn’t seem to appreciate their quality as long term investments. It’s often the case that the best opportunities are in neglected parts of the market. My main goal is to find simple clear investment ideas and avoid making stupid errors. Above all, this newsletter is a commitment to Staying Rational.

It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.

Charlie Munger

I will focus in Iberia due to a severe case of home bias but also because the peninsula is home to very interesting companies and a big part of my own portfolio is composed by Portuguese and Spanish companies. However, nothing is off limits and I might analise companies from anywhere in the world.

Some letters are going to include in-depth analysis

…while others are going to be short investment cases or even just earnings reviews. The idea is to have an investment memo and the occasional add-on of a detailed analysis backing it: including industry and competitors analysis.

I am planning to publish once a month, on average. The current pipeline for the following three months are: Ibersol, Vidrala and Linea Directa.

What’s in it for me? Learning…

Teaching is best way to learn: Putting my ideas out there will likely lead to further interactions and discussions with likeminded investors. I might even find out some analysis errors that I’d otherwise miss.

It’s also about optionality & convexity: The opportunity cost of doing these memos is low but the upside can be large. Having some kind of public record might be important in the future. And on the off chance this newsletter is successful I might think of monetising it.

Let’s see how it goes. Needless to say that all feedback is welcome and I encourage you to reach out.

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