Month: July 2022

Good Morning Ladies and Gentlemen

“Success is guaranteed if the right people make the right decisions and distinguish between hope and illusion when interpreting the facts.”
(Lea Ypi, newly interpreted and slightly amended by myself)

Our Private Mandates

You know, Ladies and Gentlemen, our private clients are solely invested in cash-generating assets. Why is this, you may want to ask; the simple reason is that most large and lasting fortunes were built thanks to cashflows and the effect of compounding. Therefore, just holding non-productive assets will probably not make you rich, and if, only relative to devaluating assets and most probably only for a short period.

The Effect of Compounding

Over the last two thousand years, almost every large fortune was built on cashflows and the effect of compounding. So why are people neglecting that fact? Maybe because of fear of losing all? People seeking maximum protection are usually geared to an unfavourable risk/reward profile, and in most cases, «fear» does not lead to the most brilliant investment strategies.

Last week’s Bank of America Fund Manager Survey

“Full capitulation” was the verdict of BofA last week’s fund manager survey. Investor pessimism was very high. Growth expectations, cash levels and equity allocations were lower than during the financial crisis of 2008/09. The cash level of global asset managers is at a two-decade high of 6.1% (the previous month, 5.6%). The last time the cash share was higher was in October 2001. Expectations for an improvement in global earnings are at an all-time low. Global growth expectations fall to an all-time low. Accordingly, equities are underweighted. Equity underweighting is at October 2008 levels, and global fund managers’ positioning is more defensive than in October 2008. A recession is priced in because of consensus among asset managers. The equity allocation to the euro area fell to its lowest level since June 2012.

Container Congestion

…and last but not least, the U.S. West Coast container congestion is nearly relieved.
https://www.cnbc.com/2022/07/22/west-coast-ports-reduce-idling-vessels-as-container-supply-increases.html

The last Contrarian

I feel like the last contrarian in the investment world. I see the signs; I read the research, mainstream and alternative, and yet, I cannot quite believe that all those companies will not be able to produce cashflows anymore or even go bust. To my understanding of equities markets, today, some great companies are priced at rather attractive levels. Twelve months ago, people would pay ridiculously high prices for companies not producing cashflows for years to come and today? Today one can buy excellent companies producing cashflows at interesting levels.

What is your view?

Ladies and Gentlemen, I am only expressing my very personal opinion in my weekly emails, nothing more; I am not a fortune teller. Now, please let me know your opinion. Will we have a summer rally, or will we enter a period of ongoing devaluation and P/E contraction, or will we maybe even see a mega crash in the second half of 2022? Please let me know your opinion, but please do not forget (instead of hitting the reply button) to send your messages to: smk@incrementum.li

Many thanks, indeed!

I wish you an excellent start to the day, a great weekend, and above all and still, peace!

Yours truly,

Stefan M. Kremeth

Wealth Management
Incrementum AG – we love managing assets

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 102
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li

Good Morning Ladies and Gentlemen

For those who have joined our readers recently, every year, I organise a year-end competition in guessing, for example, the price of gold, silver, crude oil, the SMI, a cryptocurrency or the S&P 500 Index.

Predictions

Regularly, I receive emails from readers asking me where I think the price of gold would be at the end of the year or the SMI or interest rates or the cost of silver. Those who follow my weekly emails frequently will know that I would not say I like making predictions.

Invitation

However, from time to time, I am happy to tell you what I think may happen just for fun, and since we are in July already, it is time for our traditional year-end competition. Like I did in the past, I invite you to compete with all the other readers and myself, and as always, the winner will receive one ounce of silver in the form of a silver coin. Suppose the winner stems from within Incrementum or my family, I am happy to also send a one-ounce silver coin to the second in place.

Former Winners

The list of former winners includes an old friend from university, two clients, a former fund manager and value specialist from London and regular readers. So far, none of my family members or partners was close enough to be called a winner. It is difficult, if not impossible, to guess the future, yet I look forward to receiving your bets!

Gold, Crude Oil, S&P 500

Now, Ladies and Gentlemen, I suppose we try to guess the year-end price for one ounce of Gold in USD, the S&P 500 and Brent Crude Oil in USD. All cash, no futures. The closest one wins the silver coin. The year-end prices will be taken from this page: https://marktdaten.fuw.ch/.

Ladies and Gentlemen, what do you think? What is your best guess for the year-end prices of gold, the S&P 500 and Brent Crude Oil? As always, please share your opinion with me, but please do not forget (instead of hitting the reply button) to send your messages to: smk@incrementum.li.

Many thanks, indeed!

I wish you an excellent start to the day, a great weekend, and above all and still, peace!

Yours truly,

Stefan M. Kremeth

Wealth Management
Incrementum AG – we love managing assets

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 102
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li