Mark Valek, partner at Incrementum AG and co-author of the In Gold We Trust Report, appears on SBTV to discuss reasons for holding gold today.
Month: September 2018
Why would you bet on one scenario only?
Dear Ladies and Gentlemen
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But now let us quickly check out the question “why would you bet on one scenario only?” which was asked by one of my regular readers and try to find an explanation for this.
Well, I think the reason why an investor would bet on one single scenario is quite simple, if you get the scenario right and if you get the timing right, you can make a lot of money. Therefore and to some extent betting on one single scenario is speculation. But if you don’t get the scenario right or if you don’t get the timing right or if you don’t get either right you will lose money and maybe get frustrated. As one of my partners keeps saying: “it’s not about being right, it’s about making money” and he is totally right there. Now, when managing other people’s money, like in my case, because that is what I mainly do, the goal must be to protect my client’s assets and to deliver some sort of positive return over time. This is why I wrote about the toolbox-approach some time ago. Various tools for various scenarios and even better a combination of tools to reach some minimal diversification.
The world, nature, people, politics, financial markets, currencies, etc. are in constant motion. Even if you are using various tools for different market cycles and investment scenarios within your strategic or tactical asset allocation it is difficult to make money these days but by betting on one single scenario only, you most probably will miss out on a lot of (other) opportunities. Therefore, and to answer the question, I think betting on one single scenario may lead to very large profits but from my point of view I prefer at least some minimal diversification.
What do you think? Please let me know your points of view!
But please don’t forget (instead of hitting the reply button) to send your messages to:
smk@incrementum.li
If you are still happy to spend a quick moment with me, feel free to read this short text under the following link:
Many thanks indeed for your interest and participation!
And now, Ladies and Gentlemen I wish you a great day and weekend.
Kind regards.
Yours truly,
Stefan M. Kremeth
Independent and Flexible Boutique Approach
Stefan M. Kremeth gives to the readers a detailed and accurate insight into the independent investment and asset management firm, Incrementum AG.
Liechtenstein as a jurisdiction for wealth and investment management
Stefan M. Kremeth, our CEO and Co-Founder presents in his article the reasons why would wealthy individuals choose wealth management services from Lichtenstein based asset managers.
Gold mining stocks: Experts see attractive opportunity-risk profile
Ronald-Peter Stöferle, analyst and fund manager at Incrementum and a gold mining expert, was asked how he currently views the development of gold prices and gold mining stocks.
Stefan’s weekly: What can be expected until year end?
Dear Ladies and Gentlemen
Once in a while I receive mails from one or the other reader asking me, why I am still generally positive for equities, while the world is full of problems with trade wars looming, governments piling up more and more debt and central bank balance sheets exploding and you know, Ladies and Gentlemen, I understand this fear and I am also very, very worried from time to time and a long time ago I even I used to invest my personal money according to my fears and never made money. Today I am somewhat more opportunistic, and I don’t bet all my money on one scenario but am rather using the toolbox-approach I was writing about in one of my recent publications, i.e. I like to think in scenarios, weigh my scenarios and construct portfolios accordingly.
Now, I still think many things are all but perfect, but then again, I believe this is just the way it is and this will never really change, and I certainly don’t want to see politicians and central bankers as a bunch of bad guys who primarily want to steel money from their people. I actually believe most of them are happy to do whatever it takes to keep the economy running and to make life as good as possible for as many people as possible, knowing that it will be difficult to please everybody.
With this way of thinking and some help from statistics I personally expect Q4 2018 to be a rather positive one for equities and for example a not so positive one for crude oil. Why is this you may ask, and you are right to ask that question.
Well, on November 6, 2018 midterm elections in the U.S. will be held. Looking at statistical evidence, one can see that in midterm election-years the fourth quarter is a positive one for equities. The reason behind this is that politicians usually do not want to cause negative market impacts and/or turmoil but rather want to present their achievements and this leads to an overall positive investment environment. Just imagine the U.S. and China reaching an agreement leading to a halt of their conflict on trade, tariffs and taxes. Mr. Trump and his fellow republicans could sell it to the electorate as their achievement. In addition, gas prices at the pump station are always a topic during election periods as Americans see inflation on a daily basis at the pump station. This, I think, is why more than one U.S. president tapped into the U.S. strategic oil reserves to ease any potential price increase at gas stations, which may lead to lower or at least not increasing gas prices and thus wouldn’t be positive for crude oil.
Furthermore, yesterday’s performance in the S&P 500 index marked an important positive technical point and maybe this event can be seen as the starting point for the positive Q4 2018 I am personally expecting.
And now, Ladies and Gentlemen, please keep in mind that I can’t foresee the future and whatever I am sharing with you in my weekly mails reflects my very own personal opinion and please keep on sharing your thoughts and ideas with me. Please feel encouraged to do so but please don’t forget (instead of hitting the reply button) to send your messages to:
Many thanks, indeed!
And now, Ladies and Gentlemen I wish you a great day and weekend.
Kind regards.
Yours truly,
Stefan M. Kremeth
The gold/Oktoberfest-beer ratio revisited
The long hot summer nights are a thing of the past. The time of the autumn folk festivals is dawning. The most famous of these festivities is the Oktoberfest in Munich. We at Incrementum do occasionally enjoy the Oktoberfest beer. We are particularly interested in our popular gold/Oktoberfest beer ratio, which combines both treasures.
The gold/Oktoberfest beer ratio, that we are featuring in our annual “In Gold we Trust”-reports for many years already, expresses how many Maß of beer, the traditional Bavarian one-liter beer mug, can be bought with an ounce of gold. This ratio thus reflects the development of the purchasing power of gold in comparison to the purchasing power of the Euro at the Münchner Wiesn.
Stefan’s weekly: Interview with Andy Häberli, Profond’s CIO
Dear Ladies and Gentlemen
Last week we had the chance to interview Andy Häberli, Profond’s CIO. When looking at Profond’s asset allocation one immediately notices that over 50% of all assets are invested in equities and another 30+% is in real estate. Profond invests mainly in real assets.
Now, Ladies and Gentlemen, there is a good reason for this.
At Incrementum we are also very much in favour of real assets, equities and real estate belong into this group. We furthermore like to approach financial markets with a toolbox containing various investment tools. According to investor’s needs and risk appetite we may offer individual investment solutions. The toolbox approach can be somehow compared to a medical doctor offering various medicines according to patient’s needs. Just imagine a doctor only offering one pill to cure everybody for every disease at all times. This probably would not be a very successful strategy. Same is true for approaching financial markets.
Since we cannot foresee the future and therefore cannot know where financial markets are heading, we have to develop and sometimes adapt a strategy that makes sense even during markets turmoil. A portfolio delivering regular cashflows, even if the market price of the portfolio goes up and down, is already a solid achievement. I am a firm believer of the value of positive cashflows, in fact I think cashflows are never out of fashion. If for example, you are able to generate a positive cashflow of around 4.5% p.a. over 10 years stemming from your portfolio, you have effectively built up some sort of financial safety cushion of 45% without even taking the effect of compounding into consideration.
You will still suffer and go through all the negative feelings during any potential markets crash but the great thing is that your portfolio will continue delivering cashflows regardless of the market prices of the individual holdings in your portfolio.
This, Ladies and Gentlemen, is what Mister Andy Häberli is looking at in Profond’s portfolio. Cash return on invested capital and of course he is very happy to harvest in addition price appreciation on individual investments, but it is the cashflow that makes the difference. This complex and large multi-billion Swiss Francs portfolio, managing pensions of 40’000 policy holders, is successfully run over decades including during difficult times like the financial crisis. Obviously the portfolio was hit during the financial crisis but not only did it recover but it recovered very well and exceeded its initial value by far while distributing above average payouts. This approach of seeking positive cashflows is what we are doing for years for our private clients at Incrementum,as well.
And now, Ladies and Gentlemen, please keep on sharing your thoughts and ideas with me. Please feel encouraged to do so but please don’t forget (instead of hitting the reply button) to send your messages to:
Many thanks, indeed!
And now, Ladies and Gentlemen I wish you a great day and weekend.
Kind regards.
Yours truly,
Stefan M. Kremeth
Why Bitcoin Is Technically an Inflationary Currency—Even Though Its Purchasing Power Is Increasing
Our crypto-researcher Demelza Hays explains in her article the inflationary effect of Bitcoin.
Does it come now the crash of Bitcoin, Mr. Crypto currency expert?
The Bitcoin exchange rate is last under pressure. Since the beginning of September, the cyber currency has lost more than 16 percent in some cases, falling below the psychologically important 7000 US dollar mark. Mark Valek from the Liechtenstein asset management company Incrementum talks about the reasons for the falling prices, the uncertain regulatory environment and the prospects for Bitcoin.