Month: February 2023

Good Morning Ladies and Gentlemen

«We all should want to stay ahead in a fast-paced environment yet always incorruptible and sensitive.»

Michael from California won our quick competition. He sent the correct answer, i.e. Fourth Turning by Neil Howe, and William Strauss, 27 minutes after Stefan’s weekly was sent out. He certainly was quick! I posted the one-ounce Incrementum silver coin yesterday. Congrats, dear Michael, and please let me know once you have received the coin.

What we do with our investments

Since some of you asked me what I was doing with our client’s investments, I am happy to let you know. I believe that in times like these, patience is needed. Now all our companies are starting to pay dividends, and many are even increasing them. This means that for us, and for this current “interim period” we are in, we do nothing because there is nothing clever to do. In my opinion, this patient opportunism is also part of investing. Avoiding mistakes, not trying to be too clever, waiting, cashing in dividends, and trying to avoid the daily noise. The cash flows from the dividends we are going to harvest over the coming weeks and months; will be able to be reinvested in due course. This will provide new opportunities and probably future additional cash flows.

Year-end competition

Ladies and Gentlemen, you sent me many emails with requests, and as I mentioned last week, the winners are silver, gold, and the S&P. Mark suggested a fourth one, and I do understand and feel tempted; however, for me, it would mean additional work, and I do want to keep the work limited. Thanks for your understanding!

Be prepared

My next Stefan’s weekly will be all about the year-end competition, so be prepared. I will try to convince my partners to let us know their estimates.

Please feel free to share your ideas and thoughts 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 wonderful weekend, and above all, joy!

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

Good Morning Ladies and Gentlemen

I have a quick competition for you. The first one to answer wins a one-ounce silver coin. Below you will find a sentence fragment from the beginning of the first chapter of a brilliant book, which still has a certain topicality even after having been published initially 25 years ago.

«Though we live in an era of relative peace and comfort, we have settled into a mood of pessimism about the long-term future…»

Competition

If you are the first to name the book’s title, the one-ounce silver coin is yours, and your first name will be published in my next Stefan’s weekly.

Your thoughts

I picked two of your emails and allowed myself to publish the writer’s thoughts and my replies in slightly condensed versions.

David’s thoughts

«Good point, Stefan! We increasingly worship at the altar of celebrity. How is a punk entertainer with a mob following qualified to offer advice on investment products or pharmaceuticals? Or climate change? It is apparently very effective.»

Adrian’s thoughts 

«However, what is impressive and unfortunately often not done, every investor should ask himself the following questions:

1. What do I know others do not know?

2. Is the investment in my area of expertise?

If you can answer both with yes, you are already on the right side but not yet ready. After that, you have to ask yourself, what if I am wrong with my assumptions?»

My response

One of the problems I see lies in the growing gap between people who actively accumulate knowledge because they like doing so and people who do not because it bores them. Many of the population cannot find the concentration to read books or an article exceeding the length of headlines. Their attention span is too short, and their knowledge is mainly built from watching T.V. and social media and discussing issues with peers from the same socio-cultural cohorts.
If we now consider that different perspectives on most social issues are pretty permissible, but we see how vehemently, intransigently and sometimes primitively our seemingly sensible and somewhat educated political elites defend their positions, we should not be surprised if the average citizen proves incapable of abstracting. If their superstars, idols from sports, fashion, film, and music, keep telling them what to do, they will.
Maybe the trained adoption of different perspectives at school, high school, and university, as well as a school development that is as permeable as possible, can bring about an improvement under certain circumstances. But, on the other hand, we must not harbour any illusions; the probability is very high that we will have to live with the status quo.

Asset classes

From the feedback I received, the asset classes you wanted to include in this year’s year-end competition are crude oil, gold, silver, Bitcoin, Dow Jones, S&P, Tesla, and others. Now, Tesla is, of course, an individual stock, and Bitcoin is a particular cryptocurrency, and therefore I would like to choose gold because we are the gold experts, silver because we very much like silver and the S&P because the by far most prominent part of assets managed by Incrementum is of course invested in equities.

Please feel free to share your ideas and thoughts 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 wonderful weekend, and above all, joy!

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

Good Morning Ladies and Gentlemen

One of the issues I see when speaking to investors, something I do a lot and genuinely like doing, is what I would call their «assisted thinking».

«You must not run after money; you must go towards it.»
Aristoteles Onassis

Influence

Our surroundings, family, friends, the media, social contacts, gurus, religion, books, tv, radio, politicians, bankers, a former Swiss tennis superstar, an actor playing a former FBI agent and analysts, you name it, do influence us all. But, of course, this is nothing new; I have written about it many times.

Assisted thinking

What do I mean by assisted thinking? I mean that too many investors are adopting the ideas and arguments of people (who are perhaps even long dead) without questioning how these people arrived at their ideas (economic and political environment, time period, level of education, personal beliefs, religious background, spirituality, etc.). For example, a former Swiss tennis superstar was promoting Credit Suisse as an Asset Manager for years. I suppose the main reason was that Credit Suisse offered him a frivolous amount of money for doing it, not because he was known to be a skilled selector of asset managers and chose Credit Suisse because of their excellency. What do you think the people feel that invested due to that ads campaign in all the Credit Suisse products that went bust over the last years? Alternatively, an actor that crosses my mind, a very cool actor indeed, promoted cryptos just before the previous crypto crash. I imagine he did this promotion (which was very well done, by the way) because he was paid well and not because of his expertise in blockchain and digital assets.

Fair enough

If corporates are happy to pay big heaps of money to well-known people to help them promote their products, this is all fine and if the famous people cash in handsomely, fair enough. But why on earth would investors conclude that a tennis player or an actor, a priest, guru, neighbour, taxi driver, hairdresser or a long-dead economist, if you want, i.e. people with limited academic records or limited knowledge of today’s rather complex financial environment, would be suitable in giving them any advice on choosing a bank or an investment?

Context

Ladies and Gentlemen, this beats me! I do not understand, yet I am confronted with it regularly. Please always try understanding the context of statements, advice, news, information, and research. Always ask yourself why they said, concluded, wrote, or recommended what they did. Because even the greatest of all times have their very personal views, thoughts, ideas and agendas. It would be a coincidence if they matched perfectly with yours. Come to your own conclusions, limiting assisted thinking to the max.

Next week

We are getting close to the beginning of March. Time to start another year-end competition. Let me know what you would like to include. I am aiming at three different asset classes.

Please feel free to share your ideas and thoughts 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 wonderful weekend, and above all, joy!

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

Good Morning Ladies and Gentlemen

On Tuesday, I looked at the 10-year performance of various asset classes. Today I want to share them with you. Again the numbers stem from Tuesday, but even if they should have changed slightly over the last few days, I do not think this will significantly change the performance over the entire 10-year period.

Silver

The 10-year performance of silver was negative and comes in with a big minus of  25.43%.

Gold

Gold did better. The 10-year performance comes in with a plus of 15.8%.

EuroSroxx 50

Let us look at some equities; the 10-year performance of the EuroSroxx 50 stands at plus 52.6%.

SMI

Next is the SMI, with a 10-year performance of plus 52.8%.

U.S. Stoxx 500

The U.S. Stoxx 500 10-year performance comes in with a plus of 62.9%.

DAX

The 10-year performance of the DAX stands at plus 94.46%.

Dow Jones

Furthermore, the Dow Jones Industrial, probably one of the best-known indices globally, 10-year performance stands at plus 143.7%.

Nasdaq Composite

Last but not least, the 10-year performance of the Nasdaq Composite comes in with a plus of 262.3%.

Style versus theme

What can we learn from this? A style-based or theme-based approach may make sense, depending on your investment goals. What else can we learn from this? Theme-based methods may yield extraordinary results at times. However, if you are invested in a theme during the wrong cycle, performance can be meagre and lead to frustration.

The example of silver

If you had acquired your silver investment ten years ago and did not change it, it lost roughly 25% in value. Over the same time, you had opportunity costs of over 50% versus an investor who had invested in a EuroSroxx 50 ETF.

…but who knows, after ten years of underperformance, silver may be ripe for serious outperformance?

Please feel free to share your ideas and thoughts 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, a wonderful weekend, and above all, joy.

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