Investing in Germany

Good Morning Ladies and Gentlemen

«Gentlemen, no one can stop me from getting smarter every day.»
Konrad Adenauer

Konrad Adenauer

Conrad Hermann Joseph Adenauer, Konrad Adenauer, was the first Chancellor of the Federal Republic of Germany from 1949 to 1963 and the first Federal Minister of Foreign Affairs from 1951 to 1955. During a meeting in December 1949 with members of his party, the CDU (Christian Democratic Union), he was called to have radically changed his position on joint European forces. He responded to those charges: «Gentlemen, no one can stop me from getting smarter every day.»

Germany’s recent economic history

Many hard-working and well-educated workers, professional pride, excellent and modern infrastructure (which was built after WW2 and was state of the art for decades), a liberal economic policy and cheap energy, among many other factors, have ensured that Germany could rise from a war-ravaged country to the fourth largest global economy. (Ladies and Gentlemen, I am deliberately simplifying a complex issue here. This is due to „Stefan’s weekly“ format, which should remain concise).

Germany’s economic present

I am utterly puzzled, and again I am simplifying, but why would German politicians take three functioning nuclear power plants off the grid and, on the other hand, pour thousands of tons of concrete in beautiful landscapes to be able to erect wind turbines on them and at the same time run coal-fired power plants to partially compensate for the electricity no longer produced by the shutdown nuclear power plants? Furthermore, why would German politicians hurt their small and medium-sized businesses as well as their large industrial conglomerates with exploding energy prices and risk a shrinking economic environment, recession and declining prosperity for broad sections of the population? Is this a sign of ideological blindness or, at best political opportunism?

Why Would I come up with this?

I understand if you ask yourself why Kremeth comes up with such a highly political and emotional topic in his «Stefan’s weekly». The reason is that I receive many calls, emails and questions during discussions with clients regarding investments in German companies. The consensus often is that due to the political and macroeconomic environment, there is no money to be made. Is that true? What do you reckon?

My view

Many, if not most, listed companies in Germany have an international client base and own production facilities around the globe. While it must be painful for numerous of them to see and experience what is happening in their home country, their global presence in a lot of circumstances offers solid diversification. Therefore, and this is what I am usually saying to our private clients, I see opportunities to invest in German companies at reasonable multiples and attractive dividend yields, despite the incomprehensible political developments and the expected economic consequences.

Konrad Adenauer once more

Ladies and Gentlemen, we need politicians to become smarter again, and we need them to have the courage to question their own decisions and views and, if necessary, to change their actions. Of course, we all make mistakes, but we should try to learn from them and introduce corrective actions where ever appropriate.

Disclaimer

As always, these are, of course, my very personal views. Thanks for your understanding.

Ladies and Gentlemen, please share your opinion with me, but please remember (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 and a wonderful weekend!

Yours truly,

Stefan M. Kremeth
CEO & Head of 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