Features

Francisco García Paramés: Bitcoin is gambling

Buying bitcoin is just a form of gambling, says Francisco García Paramés, Spain’s best-known fund manager – and he doesn’t see the appeal.

Buying bitcoin is just a form of gambling, says Francisco Garca Params, Spain's best-known fund manager and he doesn't see the appeal. "I'm told there are people who win at blackjack everyday, but I don't dare. I have not played bitcoin yet. It's like [betting on] red and black," he told an investing conference in Bilbao, reports El Confidencial. While bitcoin's high volatility is attractive for traders, it undermines its claims to be taken seriously. "I do not see the service it gives me as a tradeable currency if it does not have a minimum stability."

Params, who is often described as Europe's Warren Buffett, left Spanish fund group Bestinver in 2014 after a 25-year career in which he averaged returns of 16% per year. Bestinver's assets under management fell by around 30% ($2.5bn) that year, the Financial Times reported in 2015.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

He launched his own firm, Cobas Asset Management, in October last year after waiting out a two-year non-compete agreement, and his firm has now accumulated €1.34bn in assets under management, despite a slow start: the flagship Cobas Seleccin fund has returned 5.85% so far, against 5.85% for the MSCI Europe index.

That's unlikely to worry Params, given that he takes a long-term view and favours high-quality companies with good returns on capital and high barriers to entry. "When you're young you want to achieve a quick, high return and you can get it with cheap companies, so you avoid quality companies that are more expensive," he told Citywire Selector last year. "Over time you realise these cheap companies are cheap because they are regular businesses and things can go wrong. You've fallen into a value trap."

Advertisement

Recommended

Visit/currencies/600640/the-currencies-to-bet-on-this-year
Currencies

The currencies to bet on this year

The US dollar could be set to weaken this year, while the euro, Canadian dollar and the Swiss franc could be good bets for optimistic traders.
17 Jan 2020
Visit/515579/bitcoin-has-just-crashed-hard-where-will-it-go-next
Currencies

Bitcoin has just crashed hard – where will it go next?

The bitcoin price has taken a beating, down by 15% in one day. Dominic Frisby looks at what’s behind the crash, and where the cryptocurrency might go …
25 Sep 2019
Visit/510743/another-bubble-in-bitcoin
Spread betting

Another bubble in bitcoin for traders to short

This surge in the bitcoin price seems no more likely to endure than the last one, says Matthew Partridge.
16 Jul 2019
Visit/510053/bitcoin-bear-market-but-dont-sell-now
Currencies

Bitcoin is back in a bear market – but don’t sell now

After its recent spectacular rise, bitcoin suffered a whopping great selloff that, technically, put it back in a bear market. But that doesn’t mean yo…
3 Jul 2019

Most Popular

Visit/investments/commodities/gold/600686/gold-and-silver-bull-market-2020
Gold

Want to make money in 2020? Gold and silver are looking like a good bet

If you want to make money from investing, says Dominic Frisby, it’s simple: find a bull market and go long. And in 2020 gold and silver are in a bull …
22 Jan 2020
Visit/economy/600667/money-minute-wednesday-22-january-uk-public-borrowing
Economy

Money Minute Wednesday 22 January: UK public borrowing

Today's Money Minute looks ahead to the latest on of the UK's public finances, with the Office for Budget Responsibility’s forecasts for borrowing thi…
22 Jan 2020
Visit/investments/stocks-and-shares/share-tips/600653/indias-small-and-mid-cap-stocks-are-set-for-big
Share tips

India’s small and mid-cap stocks are set for big gains – here are three to buy now

Each week, a professional investor tells us where he’d put his money. This week: David Cornell of the India Capital Growth Fund highlights three favou…
20 Jan 2020
Visit/investments/stocks-and-shares/share-tips/600636/class-acts-going-cheap-buy-into-europes-best
Share tips

Class acts going cheap: buy into Europe’s best bargains

Value investing appears to be making a comeback, while shares on this side of the Atlantic are more appealing on metrics such as price/earnings ratios…
16 Jan 2020