Month: May 2024

Good Morning Ladies and Gentlemen

“If I say something right that the wrong people like, then the right thing doesn’t automatically become wrong.“

Andreas Rebers, cabaret artist

Dissent

My preferred definition of “dissent” in financial markets emphasizes the value of differing opinions or views between market participants, analysts, or other experts. These variations can span across various aspects of the financial markets, such as the preference of certain asset classes, the valuation of assets, the direction of share prices, interest rate trends, or the overall economic situation. It’s crucial to understand that having different points of view in financial markets (and everything else) is not only normal but also beneficial, as these are influenced by many factors, including uncertainty.

Consistency

Ladies and Gentlemen, you know, my partners just published their “In Gold we Trust Report.” My last “Stefan’s Weekly” was dedicated to it. Many thanks for the many positive feedbacks by mail and on LinkedIn. I truly believe this report represents an excellent piece of work, regardless of whether one likes gold or not. Personally, I prefer “productive”, i.e. cash flow-producing assets, but I am always intrigued by the quality of my partners’ arguments. However, sometimes, I receive a comment or two from “irritated” friends and/or readers claiming that I was not consistent in my “thinking” by highlighting non-productive assets while otherwise advocating cash flows as “the most important thing”. The only thing I can say is that to me, this is never a question of ideology but common sense. And common sense in financial markets, as everywhere really, is to look at and listen to different perspectives.

Ideology

This brings me back to my “Stefan’s Weekly” from some weeks ago. If I try not to be caught up by ideological thoughts, I very much feel like I can appreciate someone’s work, thoughts, etc., even if I am not sharing every aspect of that person’s opinion. Furthermore, I also think it would be presumptuous to believe that I/we know or understand everything, especially since understanding in the sense of comprehending does not necessarily mean knowing something or someone 100%. Why is it that in today’s world, I almost feel people are obsessed with being irritated, outraged or offended? Ladies and Gentlemen, dissent is healthy! It makes us think and question our own beliefs.

Equities

Of course, I am still a great believer in equity investments. Statistically, no other asset class has performed better over the last 100+ years. Volatility may be an issue for some investors; I do understand that. Yet, in every society, people’s demands are rising faster than the economy allows, and thus, solid companies (and governments) are bound to grow. If I could invest in governments, I probably would, as governments have a monopoly and can raise their prices at will and grow incessantly. Governments produce crazy cash flows. Most of them have a spending issue, but that, I believe, could be taken care of. Anyway, since I cannot invest in governments, I mainly invest in equities of solid cash flow-producing companies instead while trying to stay diversified by using a multi-asset approach.

Today’s quote

I did not choose today’s quote by chance. I very much think the German cabaret artist, musician and composer Andreas Rebers is correct in claiming that if “I say something right that the wrong people like, then the right thing doesn’t automatically become wrong.” By the way, this is also true for politics. Think about it.

Ladies and Gentlemen

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 and the 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

Good Morning Ladies and Gentlemen

“Plurality of opinions is the engine of democracy.“

Hannah Arendt

My partners Ronni and Mark

Every May, my partners, Ronald P. Stöferle and Mark J. Valek, look horrible, overtired, exhausted, and still happy. This is because the “In Gold We Trust” report is due every May, and until it is published, especially towards the end of the production phase, they are committed to giving their hearts and selling their souls to give you and us another fantastic reading experience. Sleepless nights, coordinating dozens of people, proofreading, and preparing press conferences and interviews culminate after months of hard work in a few concentrated days.

IGWT 2024 introduction video

First, I am happy to share the introduction videos in English and German with you. Please feel free to click on the following links to watch them. Ronni points out the critical points of this year’s report.
Video presentation: In Gold We Trust report 2024 – English
Video presentation: In Gold We Trust report 2024 – German

IGWT 2024 “The New Gold Playbook”

Second, I am happy to share with you the reports that can be downloaded in extended and compact versions via the following links:
English                  German
Compact versions here:
English                  German                 Spanish

Thanks

Many thanks to Ronni, Mark, our assistants Jeannine, Lois and Richard (who just passed his final CFA exams and became an official CFA chart holder), as well as all our external experts and helping hands, for your outstanding work again. Every year, I feel like it cannot get any better, and every year, you prove me wrong! Thank you!

Ladies and Gentlemen

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 and the 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

Good Morning Ladies and Gentlemen

“It’s warmer inside the herd; it can be very cold outside of it.“

Attributed to: Jean Marie Eveillard

Last week’s «Stefan’s Weekly»

Many thanks to all the readers who sent in their comments. It was overwhelming to receive so many positive emails full of compliments. Many thanks, indeed! Let me take my last week’s thoughts just a little further in today’s “Stefan’s Weekly”.

The effects of imprinting

Imprinting is a rapid and relatively permanent learning process that occurs during critical periods. It impacts an individual’s behaviour, relationships, and overall development. imprinting primarily relates to biological and cultural learning, yet it indirectly influences our ideologies. Cultural, political, and cognitive factors interact to shape our worldview, and early imprints play a significant role in this process. In other words, most of us should not overestimate our own ideologies, as they are usually the result of imprinting during critical periods in our lives.

Imprinting in asset management

In asset management, imprinting during critical periods may play a significant role, i.e., losses during a market crash, the Great Financial Crisis, or hypes of tech, biotech, meme stocks, or any other such past and possibly future scenario. Then, by definition, the most sensible allocation of available funds cannot be taken for granted. Fear and greed influence the way we think and act. Ladies and Gentlemen, it is not an appropriate attitude, yet we are not immune to it.

A good way to invest

You may ask, “What is a good way to invest, then?” That is a valid question! The answer is: “It depends!” It depends on your views, investment horizon, investment preferences, risk capacity, and willingness to take risks. I generally like the idea of a competition of ideas for the most sensible allocation of available funds because I believe funds should be able to achieve their maximum effect. Personally, I have always liked cash flow-producing investments, and you know what, when my partners and I started Incrementum in 2013, we went financially through challenging times because cash flows did not match costs during the first years of developing our business, and I probably got further imprinted with this idea of the importance of regular cash flows.

What we do for our private clients

We very much believe in long-term investing. Progress usually takes time, especially in asset management. A good portfolio takes time to develop, grow, and progress; we also think it needs some basic maintenance. For our private clients, we try to find cash flow-producing investments at sensible valuations within the defined investment universe across various sectors, intending to lead to sensible diversification. In those portfolios, we seek to avoid ideological and short-term thinking. It is a predominantly bottom-up approach, yet we always look at the macro environment for indications of the potential development of our investments. Still, we are deliberately not trying to call the market but rather stick to a company’s fundamentals in the expectation of gushing cash flows.

The effect of compounding

Compounding positively influences performance due to the regular reinvesting of cash flows generated in our portfolios. The pleasant side effect of this compound interest effect is its intrinsic inflation protection.

Ladies and Gentlemen

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 and the 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

Good Morning Ladies and Gentlemen

“It is the duty of the human mind to understand that there are things it cannot understand.“

Soren Kierkegaard

Ideology – general aspects

Liberal, democratic structures based on capitalism no longer seem to be desired by a considerable number of voters. Ideological views are advocated with a vehemence that leaves almost no room for other views. Black or white, no shades of grey or even colours seem acceptable. Yet, we humans are so incredibly individual by nature and definition that it never ceases to amaze me how we willingly allow ourselves to be pressed into a mould. I am aware that the psychological element of belonging consciously or unconsciously exerts a great influence on our behaviour, and yet this ideological groupthink frustrates me; in this way, I believe individual narcissism has taken on an unhealthy dimension and tolerant and broadly diversified community-building appears to become ever more difficult.

What is in it?

I sort of see what is in it for ideological leaders and why they want to push their ideology. For them, it is a question of fame, money, and power. However, what on earth is in it for the followers? Belonging to the “good” guys (because their opponents are always the bad guys), or maybe it is the feeling of grasping the “real” idea? It amazes me that even reasonably well-educated contemporaries seem to develop difficulties abstracting and, therefore, simply do not have the mental capacity to avoid being taken in by ideologies. Quite frankly, ideological leaders are not trying to convince you, me, us because they like you, me, us; they do not even know you, me, us. They just want you, me, us because every follower gives them more fame, more money, and more power.

Ideology in asset management

Yes, Ladies and Gentlemen, these thoughts of mine were, of course, just an introduction to the topic. I am primarily concerned with the influence of ideologies on your and our asset management efforts. The same structure as mentioned above applies to asset management. If the tendency to be ideologically blinded and the will to have seen it coming at some point is weighted higher than the need for regular and reasonably evenly distributed returns from a diversified approach, then in my opinion, the awareness to abstract and thus the capacity to pursue a sensible investment approach is lacking. This is where our responsibility as educated individuals in asset management comes in. We need to exercise critical thinking and not be swayed by the allure of ideologies. It is also true in asset management that ideological leaders primarily seek fame, money, power and probably even much more money just because more is more.

Are we fit enough?

Hmhhh, Ladies and Gentlemen, if ideologies become more important to us than the big picture, then we should not be surprised if the happiness of the moment takes precedence over the happiness of our personal “long-term balance sheet”. This, Ladies and Gentlemen, at least to me, would mean we are probably not fit enough to prosper in life in general or as in this working hypothesis in asset management.

Ladies and Gentlemen
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 and the weekend!

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