Month: October 2025

Good Morning Ladies and Gentlemen

”That is very, very unusual; since 2005, only the rebounds after the Global Financial Crisis and Covid-19 have had bigger five-month rallies — and they both followed much deeper initial selloffs.”

John Authers

As the prices of precious metals have increased substantially, interest rates have exhibited remarkable stability. On the other hand, the US dollar has demonstrated a significant weakening, potentially resulting in imported inflation. Interesting, no?

Silver

Wow, Ladies and Gentlemen, Silver stands at USD 54.12. Who would have thought? Obviously, no modifications have been made to our “betting landscape”. Hans holds the highest bid at USD 47.80, while Mark has submitted the lowest bid at USD 35.77. If Silver performs the way it did the last few weeks, Hans will be way off and still take that one home on December 31, 2025.

Shanghai Composite

The Shanghai Composite stands at 3’916. Mark is in the lead, and Hans is positioned in second. Hans submitted the highest bid at 3’980 points, marginally higher, approximately five points, than the corresponding bid submitted by Mark. In stark contrast, Niklas’s lowest recorded bid stands at 2’950 points.

10-Year U.S. Treasury

The 10-year U.S. Treasury trades at 4.03%. I am surprised to see that interest rates are so low. I would have expected current trade policies to lead to much higher inflation and thus interest rates. Maybe this is still to come, but my assumption was wrong so far. Anyway, in the 10-year U.S. Treasury securities market, Mike has the highest recorded bet at 5.55%, while Hans maintains the lowest at 3.8%. To me, this is still the most interesting bet. I am curious if we will see inflation kick in before year-end.

Ladies and Gentlemen

Feel free to send your messages to smk@incrementum.li. Many thanks, indeed!

I wish you an excellent start to the day and 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 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li

Good Morning Ladies and Gentlemen

”Rapid revenue growth tomorrow is the only reason investors are willing to look past falling free cash flows today.”

Jesse Felder

While market sentiment and market valuations are essential considerations, one can also quantify price movements themselves and their potential implications. A recent study from Harvard revealed that when a sector surpasses the overall stock market by 150% over two years, the likelihood of experiencing a 40% crash increases to as much as 80%.

Is AI the Definition of a Bubble?

Recently, I came across a projection stating that total AI capital expenditures in the U.S. are expected to surpass USD 500 billion in 2026 and 2027, comparable to Singapore’s annual GDP. In contrast, The Wall Street Journal has reported that American consumers currently spend only USD12 billion annually on AI services, roughly equivalent to Somalia’s GDP. When you consider the stark economic differences between Singapore and Somalia, it becomes clear just how vast the divide is between the ambitious vision for AI and its current reality. Quite intriguing, is it not? Oh, yes, Bloomberg coined this a “buy first, ask questions later” rally.

Probably, But Not Only

Independent power producers and the semiconductor sector, in particular, have emerged as significant beneficiaries of the ongoing AI capital expenditure bubble. However, eventually, results will need to align with expectations, which could lead to a rude awakening. This will affect not only AI stocks, AI-ETFs, and AI options but also many other risk assets, including cryptocurrencies. The current level of leverage surpasses anything we’ve witnessed in the past. Based on my experiences over the last 38 years in my professional career, this situation appears unsustainable.

Is there a Safe Heaven

Yes, absolutely, short-term government bonds in your reference currency are an option. However, in all major currency regions, inflation is exceeding the interest rates on those government bonds, which means that in real terms, such an investment is losing value, albeit less than what we might anticipate during a market downturn. There is no free lunch!

Crude Oil

I am frequently asked about the crude oil sector, which can generate impressive cash flows and appears to be free from a bubble. However, it may be premature to make significant investments at this time. U.S. shale drillers, for example, are currently facing rising tungsten prices, a rare and exceptionally hard metal crucial for industrial tools like drill bits. This increase is largely due to Chinese export controls that have restricted supply, presenting a potential risk to U.S. fossil fuel production. Tungsten accounts for up to 75% of the drill bits used in oil fields, and China dominates global production, controlling over two-thirds of the supply. Additionally, as a result of the current U.S. administration’s tariff policies, China has become reluctant to increase tungsten sales or offer it at reduced prices. The elevated tariffs on other commodities, such as steel, which is also widely used in U.S. oil fields, further strain the profit margins of suppliers in the energy sector.
Moreover, crude oil prices remain suppressed due to the ongoing conflict between Russia and Ukraine. The low prices for oil and gas are adversely affecting the Russian economy, compelling oil-producing nations to politically motivated levels of production that exceed what would be sustainable at current price points. The certainly not entirely unintended consequence of this “tactical intervention” is lower energy prices for both households and industries.

Conclusion

I am surprised that markets hold up so well. If the market crashes, there are not many safe havens. Last but not least, one should always remember what Bernard Baruch, one of the few who avoided the 1929 stock market crash, famously said: “I made my money by selling too soon”.

Ladies and Gentlemen

Feel free to send your messages to smk@incrementum.li. Many thanks, indeed!

I wish you an excellent start to the day and 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 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li

Good Morning Ladies and Gentlemen

”No matter how many warnings are issued or how many laws are written, people will find new ways to believe that the good times can last forever.”

Andrew Ross Sorkin

The equally weighted S&P 500 index has exhibited a sideways movement since the conclusion of July. In contrast, the traditional S&P 500 index has demonstrated a significant upward trajectory during the same period. This divergence in performance indicates that a select group of equities, often referred to as the “magnificent seven”, have been pivotal in driving the overall dynamics of the U.S. stock market.

Economic Landscape and Custom Duties

Numerous developed nations’ economic landscapes are currently exhibiting suboptimal performance. The United States’ situation is no different. However, it experienced robust economic growth leading up to 2025’s commencement and still benefits from it.
Customs duties are an additional tax obligation imposed by governments on imported goods, functioning similarly to tax mechanisms. Consequently, an increase in value-added tax (VAT), for example, would have a similar impact on consumers, probably leading to higher costs for goods and services.

Economic Landscape and Supply Changes

Despite the challenges presented by tariffs both threatened and implemented by the United States, global supply chains appear to have stabilised. A key contributing factor to this resilience may be attributed to the strategic realignment and adjustment of supply chains undertaken by many companies in response to the COVID-19 pandemic. The necessity for a diversified approach to sourcing during this period has fostered enhanced robustness within these supply chains.

Corporate Indebtness

In the aftermath of the financial crisis, many corporations have substantially reduced their levels of indebtedness, demonstrating a tendency towards deleveraging and prudent financial management. This shift indicates a strategic move away from excessive leverage, allowing firms to strengthen their balance sheets and enhance overall financial stability.

Government Indebtness

While France is often cited as a negative example of government debt in Europe, and it indeed has its own debt challenges, it is important to recognise that France has refinanced its debt during periods of low interest rates by issuing long-term government bonds at these low rates. As a result, France is less affected by short-term interest rate fluctuations. In contrast, the situation in the United States is quite different. Since the financial crisis, government debt has increasingly been refinanced on a short-, to very short-term basis. Therefore, the dependence on short-term interest rates in the U.S. is a critical factor that cannot be overlooked.

Conclusion I

After the recent and hefty increase, I would not be surprised by a trend away from tangible assets towards productive assets. Other than that, the three major trends are demography, technology, and changes in global politics, which will continue to accompany us.

Conclusion II

Oh yes, and one last one, I could well imagine that if the Supreme Court were to declare customs duties unconstitutional and subsequently abolish them, it could potentially precipitate significant disruptions in the American bond market. Do not get me wrong, I think tariffs are generally bad for the economy and especially for consumers; however, the market has accepted this new reality, and any new changes would likely lead to an even greater loss of trust than already experienced.

Ladies and Gentlemen

Feel free to send your messages to smk@incrementum.li. Many thanks, indeed!

I wish you an excellent start to the day and 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 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li