Brazil Value Talks: Guilherme Cesar
Multiplied Invested Capital by 3.5x in 6 Years
Today I have the pleasure of interviewing Brazilian investor Guilherme Cesar.
From March 2019 to May 2025 his historic performance will be the envy of anyone.
His portfolio returned more than 250% in the period, versus 45% for Ibovespa.
This guy knows how to generate real value.
Shall we meet him?
BS: Guilherme, could you tell us a little about yourself?
GC: I am an ophthalmologist specializing in retina and cataracts. Since I was young, I have always been interested in the financial market, but it was in recent years, after starting my medical career and consolidating my professional life, that I began to study investments in a more structured and in-depth way. I have an analytical approach, focused on solid companies that are discounted by temporary events, always looking for positive risk-return asymmetries.
BS: What is your strategy for making money on the stock market?
GC: My strategy is to identify resilient companies, with good fundamentals, that are going through moments of devaluation not justified by structural deterioration. I enter these moments of distortion, focusing on the medium term, seeking asymmetric returns with a margin of safety.
BS: What is your process for finding a new buy opportunity? What filters do you use?
GC: I start by identifying significant declines in assets that I already monitor or that attract attention due to excessive selling flow. Then I apply fundamentalist filters (profitability, cash, debt, governance), assess the macro and sector context, examine the multiples and, finally, use graphical analysis just to help with the timing of the entry.
BS: How do you value a share: DCF, Multiples, implied IRR, a mix of the previous ones, …?
GC: I use a mix of approaches: DCF to assess intrinsic value, comparable multiples for relative benchmarking, and implied IRR to understand risk-adjusted return. I like to cross-reference the three to reinforce conviction.
BS: How do you like to build your stock portfolio, considering the number of companies, sectors and concentration?
GC: I maintain a concentrated portfolio of 8 to 12 stocks. I prefer to have a greater weight in high conviction positions, while still maintaining a balanced sector diversification between cyclical and defensive sectors.
BS: How often do you like to rebalance your portfolio?
GC: Usually every quarter or when there are relevant changes in the companies' fundamentals or in the macro scenario. If one thesis loses strength or another becomes more attractive, I adjust.
BS: How long on average do you hold a position in your portfolio?
GC: Generally 6 to 18 months, but it depends on the maturation of the catalysts and the asset's repricing cycle.
BS: Do you believe that graphical analysis, together with fundamental analysis, can help with the buying and selling points of stocks?
GC: Yes. Fundamental analysis guides my investment decision. Graphical analysis is an auxiliary tool to find good entry points and avoid entering an unsettled downtrend.
BS: What are your favorite sectors on the Stock Exchange? And the ones you avoid? Why?
GC: Favorites: Energy (oil), pulp and paper, and healthcare – all have defensive characteristics, strong margins or currency protection.
Avoid: Civil construction and aviation, as they are very sensitive to the macro scenario, with narrow margins and volatile results.
BS: Do you use stop? Where do you usually place it?
GC: No. I invest based on fundamentals. If the thesis remains valid, I stay even with volatility. I only exit if the original rationale is broken.
BS: Do you use derivatives? What is your strategy?
GC: Very rarely and never for leverage. I occasionally use options for specific event protection.
BS: What is the cheapest company on the stock market today?