Monat: November 2018

Was kann man erwarten?

Posted on by Stefan Markus Kremeth

Dear Ladies and Gentlemen

I was asked by one of my readers to elaborate my view on what can be expected by financial markets until year end? I am happy to do so, but please keep in mind that this is my very personal view and that I can’t foresee the future.

Statistically the best two quarters of the year just started. Additionally, in years of mid-term elections in the U.S. the chances of a yearend rally are fairly good. Moreover, after the recent market slide followed by an impressive rise, the chart technics all of a sudden show some potential for further improvements.

Does this mean everything is fine? No, of course it doesn’t, but for the time being interest rate increases seem to be priced in, trade war fears seem to be priced in, political changes in Germany (CDU/CSU’s and SPD’s massive losses) and in the U.S. (democrats take control of the house) seem to be priced in.

I personally believe we will still see volatility but I would be surprised not to see markets moving higher in the weeks to come. I first expect a short consolidation during the next days and thereafter further increases.
Now, what does this situation teach us? I think that some scare tactics by media and so-called “financial experts” have led to some very unpleasant situations during the last weeks. Panicking investors have sold their equities at the bottom of the market just to see them going up, in the last few days.
Look, Ladies and Gentlemen, 2018 so far is a very special year, we had two 10% crashes in the Standard & Poor’s Index within the past 10 months and we are still not in what is called a bear market, this didn’t happen since the mid 50ties.
But even if we eventually enter a bear market, which we will as bear markets just happen from time to time, this may be seen as normal market behaviour. You know, bear markets happen in average every 3.5 years and last for approximately one year. That is – I admit an unpleasant – part of investing, but so what. If you stick to your investments (as long as they are solid and net free cashflow producing) and if your investments pay dividends, you can always collect the dividends, spend the money or reinvest and wait until your stocks go up again. Just don’t let yourself get too excited.

Please never forget, investing is a long-term exercise and please never forget market corrections are normal, a common thing to happen. The link below shows you a table published by Wikipedia with stock market crashes and bear markets and as you will see, there were many and nevertheless we are still alive and kicking:

https://en.wikipedia.org/wiki/List_of_stock_market_crashes_and_bear_markets

Please do not hesitate to share your thoughts with me on the interview or on whatever seems interesting or bothering to you. Please feel encouraged to do so but please don’t forget (instead of hitting the reply button) to send your messages to:

smk@incrementum.li

Many thanks, indeed!

And now, Ladies and Gentlemen I wish you a great day and weekend.

Kind regards.

Yours truly,

Stefan M. Kremeth
Wealth Management
Incrementum AG

Ronald-Peter Stöferle im Exklusiv-Interview mit biallo.de

Posted on by Ronald Stöferle

• Im Vergleich zu den Aktienmärkten zeigt sich der Goldpreis derzeit überraschend stabil.

• Fondsmanager Ronald-Peter Stöferle hält Gold und Goldminen derzeit für attraktiv bewertet. Der starke US-Dollar wirke allerdings noch als Bremsklotz.

• „In einem Umfeld der Währungskriege war Gold historisch gesehen eigentlich immer eine ganz gute Idee“, sagt Stöferle im Exklusiv-Interview mit biallo.de.

Peter und der Wolf

Posted on by Stefan Markus Kremeth

Dear Ladies and Gentlemen

Thank you very much for all your feedback to the video interview. My friend Robert made me laugh when he wrote in response to my quote that wine may become currency, that he just invested in some excellent “currency” during his recent trip to Slovenia and is enjoying it very much.

I also received some feedback to my views on equities and on gold and this is why today I would like to look at a phenomenon which is bothering me to some extent.

Do you know the story of Peter and the Wolf? I guess you do.

As most of you know, I am a reasonably humble investor. I am aware of the fact that sometimes I make mistakes when investing and I am also aware of the fact that we live in a world of increasing government debt and I can’t say I like it and on top of that I am also a humble gold bug, knowing about the positive and specific core features of gold as a means for very long-term value, i.e. capital preservation.

However, I also really don’t want to pay the opportunity cost of only investing in one asset class and I really like cashflows and gold doesn’t deliver those. Now, since I want cashflows but can’t find them on the fixed income (bonds, etc) side, I am constantly forced to screen the markets for equities of cashflow producing companies with solid and sustainable business models, whose valuations are not too stretched. Clients sometimes ask me why I would buy equities of companies when they just had missed their quarterly results. Well, Ladies and Gentlemen, to explain this in a very simplified manner, if the underlying business of such a company is solid and the cashflows are even coming in during difficult market periods and the company gets hit because it missed quarterly results estimates produced by some financial analysts, I usually look at it as a gift by the market and buy into the company at somewhat lower prices, wait, see and collect dividends for my clients and if over time market participants start to forget the fact that the company had missed their targets or the company even beats some quarters down the road unexpectedly analyst’s forecasts, the stock usually starts climbing again and the investment delivers a capital gain next to the dividends. It is not always that simple, but I think you get the idea.

But now you may ask, what this has to do with Peter and the wolf? The thing is that I share some of the views of gold bugs but unfortunately many gold bugs are behaving like Peter, they are shouting “wolf”, “wolf”, “wolf”, a little louder year after year, but there is no wolf coming. In the beginning people (investors) are concerned and are (still) listening but over time less and less people are concerned and at the end no one believes in the wolf anymore, they begin neglecting protection – and that may be the moment the wolf is arriving.
The phenomenon I see is that some gold bugs have the right intention but instead of staying humble, they do get bored or even frustrated because the wolf is not quite arriving yet and so they start shouting louder and louder. At Incrementum AG we try to avoid this by producing the Incrementum “In Gold We Trust“ gold report only once a year because in the end any very long-term “protection” shouldn’t be influenced by monthly or quarterly market noise and/or chatter.

To sum it up, Ladies and Gentlemen, I believe the wolf will be coming one day and this is why my tool box approach offering a combination of various asset classes makes so much sense to me. But paying the opportunity cost of a dogmatic investment style doesn’t make sense whatsoever.

Please do not hesitate to share your thoughts with me on the interview or on whatever seems interesting or bothering to you. Please feel encouraged to do so but please don’t forget (instead of hitting the reply button) to send your messages to:
smk@incrementum.li
Many thanks, indeed!

And now, Ladies and Gentlemen I wish you a great day and weekend.
Kind regards.
Yours truly,

Stefan M. Kremeth
Wealth Management
Incrementum AG