Category: In the Press

There is no magic!

Posted on by Stefan Markus Kremeth

Dear Ladies and Gentlemen

There is no magic! Financial well-being and prosperity need a minimum amount of economic growth.

You know, I received a fair amount of positive feedback to Anton’s article on increased productivity and economic growth thanks to cheap and all time readily available (fossil) energy and again, Ladies and Gentlemen, there is no magic, economic growth demands cheap and 24/7 readily available energy.

… and without economic growth, large parts of populations will not be able of keeping their standard of living on current levels and even less of increasing it, unfortunately there is no magic there either.

I believe if large parts of a population feel economic pressure, eventually those people will want to vent their feelings, and this may lead to unpredictable and inconvenient consequences. The yellow vests movement in France is only one very recent example right in front of our doorsteps.

The cost of such protests is enormous and, there is again no magic, will have to be borne by the country’s population. While the wealthier cohort will not really feel any impact, it is a twist of fate that the less fortunate cohort, the ones that are in the street protesting for a better life, will be hurt even more over time through indirect tax increases, inflation, general increase in cost of living.

The question for me and my readers is how to invest in such an environment. I firmly believe there is again no magic. If you want to have some sort of cash return on your assets in a 0% or negative interest environment, you can get it by accepting volatility. If you are ready to accept volatility you can have easily 4% – 5% cash return on your investments. But volatility is not for everyone. People get very quickly very nervous. Long term statistics show that equities beat bonds but the price you pay for the extra performance of equities over bonds is volatility. No magic, Ladies and Gentlemen! I don’t mind volatility; I prefer low volatility to high volatility, but I don’t really mind it that much.

Besides equities, where do you want to invest your money and receive a cash return if not in equities?

What is your opinion, Ladies and Gentlemen, as Anton did, please share your thoughts, ideas and/or experiences with me and my readers, but please don’t forget (instead of hitting the reply button) to send your messages to:

smk@incrementum.li

Many thanks, indeed!

And now, Ladies and Gentlemen I wish you a great day and weekend.

Kind regards.

Yours truly,

Stefan M. Kremeth
Wealth Management
Incrementum AG

Inescapable Realities of Prosperity

Posted on by Stefan Markus Kremeth

Dear Ladies and Gentlemen
 
One of my readers sent me a link to an article he published on LinkedIn. I think the article is fundamentally sound, proposes some of his very personal interesting ideas and assumptions and is well written. I have thus asked him permission to publish his article or the link to his article in my weekly mail and was granted that. Thank you very much for sharing your knowledge and thoughts, Anton!
 
Now, the original title of the article is: “Energy, Productivity & Debt – Inescapable Realities of Prosperity” and the original article with some illustrating charts and graphs can be found under the following link:
 
https://www.linkedin.com/pulse/energy-productivity-debt-inescapable-realities-anton-f-balint/
 
I highly recommend reading the original article. However, one or the other passage may need some second reading especially for non-native English speakers, I think it is worth it.
 
What is your opinion, Ladies and Gentlemen, as Anton did, please share your thoughts, ideas and/or experiences with me and my readers, but please don’t forget (instead of hitting the reply button) to send your messages to:
 
smk@incrementum.li
 
Many thanks, indeed!
 
And now, Ladies and Gentlemen I wish you a great day and weekend.
Kind regards.

Yours truly,

Stefan M. Kremeth
Wealth Management
Incrementum AG

In Gold we Trust

Posted on by Stefan Markus Kremeth

Dear Ladies and Gentlemen
 
I am happy to announce that our yearly report “In Gold we Trust” on monetary policies and gold will be published on May 28, 2019. Please have a look at our website and maybe even the teaser video we produced under the following link:
 
https://ingoldwetrust.report/
 
You may be sure to find many interesting charts and stories, illustrating known and lesser known aspects of the special situation of monetary policies we’re in for so many years already and which will last for some more time I suppose.
 
In my humble and slightly bias opinion we can be certain that Ronni, Mark and their helping colleagues have been digging into the dirt to bring to light facts usually not covered by mainstream media.
 
Another 18 days and Incrementum’s 2019 “In Gold we Trust” report will be published, this year for the first time in Chinese, next to English and German.
 
Ladies and Gentlemen, in anticipation of our Incrementum “In Gold we Trust” report I wish you a great day and weekend.
 
Kind regards,
 
Yours truly,

Stefan M. Kremeth
Wealth Management
Incrementum AG

Interview: Mark Valek, The Future of Gold Conference, March 2019

Posted on by Mark Justin Valek

In this interview, conducted by Brecht Arnaert, editor-in-chief of Macrotrends, Mark Valek highlights the differences (and similarities) between crypto and gold, and considers what putting them together can do for smoothing our your potential returns.

Mark Valek: „Gold and Bitcoin: Stronger Together?“

Posted on by Mark Justin Valek

Mark Valek discusses the relationship between gold and crypto-currencies and why combining them into one strategy can form a great position for weathering the coming economic storm.
From “The Future of Gold Conference”, March 2019.

Michael J. Burry

Posted on by Stefan Markus Kremeth

Dear Ladies and Gentlemen
 
Michael J. Burry is an American, physician, investor, and hedge fund manager. He was founder of the hedge fund Scion Capital, which he ran from 2000 until 2008. Burry was one of the first investors to recognize and profit from the subprime mortgage crisis and became famous when he was portrayed in the biographical drama “the big short”.
 
Why would I dedicate my weekly mail to Michael J. Burry you may ask?
 
I got the idea when communicating with Robert, one of my regular readers after my last weekly mail on my personal investment style. The conversation went very much into the direction of the difficulties I am facing when managing my clients’ assets. Prior to the conversation with Robert I have had a similar conversation with David from Australia.
 
What I wrote to them was that the difficulty for me as a money manager is to see and recognise facts that make an investment an interesting one or a not so interesting one. This may seem obvious but with the amount of information available today, I still want to stress the fact that sometimes it is very hard to see the obvious because our mind gets distracted by market “noise” and headlines and maybe colleagues and/or a client who calls and tells me what he just had learned from a friend, etc.. Thus to recognise the obvious and if possible to recognise it ex ante, is not such an apparent thing. Also, and this is utterly important, it is vital not only to see the risks of an investment but potential chances of it as well. As you know, I am getting paid for investing my clients’ assets and for achieving positive results. Looking at the risk side for too long keeps me from seeing chances.
 
I try very hard to stick to my investment principles and to keep all the noise outside of my focus. I do not read investment-advise from banks and brokers and don’t go to their investment meetings. Most of my investment decisions I take on weekends, as I don’t want to be influenced by prices going up and down and I usually inform my partners during our weekly asset allocation meetings on Monday afternoon about my ideas, which I generally implement afterwards. In this respect I am rather focused and structured.
 
…and still, I do make mistakes and I am really not very good at timing the market. But the long-term results nevertheless are rather inspiring. My client’s portfolios show less volatility and better performance in the long run than any of the markets I am investing in. I am only able to capture a part of the gains on the upside (in average roughly 65%) but during difficult periods, downswings, etc. our portfolios are mainly very stable and, in the past, only lost roughly 15% – 35% of what the markets would lose.
 
You know, I think it is important to question one’s investment approach from time to time and make sure that one’s expertise (especially strong expertise) is not holding one back of seeing chances outside the field of expertise. Michael J. Burry was very successful with sticking to his principles and with seeking chances and exploiting opportunities. The mix was perfect at the time.
 
What is your opinion, Ladies and Gentlemen, I am asking you again, will we see a major market correction or soaring markets? Let me know about your investment style and please share your investment experiences with me and my readers, but please don’t forget (instead of hitting the reply button) to send your messages to:
 
smk@incrementum.li
 
Many thanks, indeed!
 
And now, Ladies and Gentlemen I wish you a great day and weekend.

Kind regards
 
Yours truly,

Stefan M. Kremeth
Wealth Management
Incrementum AG

“Die Nullzins Falle”

Posted on by Stefan Markus Kremeth

Dear Ladies and Gentlemen

Due to the Easter weekend I decided not to send out my weekly last Friday.

Now, today I would like to mention a book called “Die Nullzins Falle”. My partner Ronald P. Stöferle acted as one of the three co-authors of the book. As the title suggests “Die Nullzins Falle” describes the authors’ views on long-term socio-economic effects of the current ultra-low interest rates. The book takes on purpose a rather critical view and intends to elaborate on the riskier, more unpleasant, maybe even dangerous side of current monetary policies.

The book certainly makes an interesting read and it can be ordered in any online bookstore under the ISBN number: 978-3-95972-019-9.

These days I receive a fair number of messages and phone calls from private clients and investors. As we are approaching new highs in the markets one part of the people calling me or writing to me suggests a sudden market crash, while the other half is seeing even higher prices.

I simply don’t know where the markets are heading but I must admit I like taking profits and that is exactly what I am doing now. I sell bits and pieces here and there. I am selling small positions into the strength. Taking profits is a very satisfying thing to do and even if I may miss out on another up-move, I simply don’t care. Just to be clear, I am not liquidating any portfolio but am rather selling very small positions here and there and only into the strength.

While I am currently a net seller of equities, I am still a buyer of equities of companies that seem somewhat out of favour. However, even the companies I am currently considering as add-ons to the portfolios always have to be net free cash-flow positive and not suffering from any negative structural issues. Sticking to that rule I might have to wait a little until such companies’ equities will be traded up again at some time in the future but until then the positive cash-flows will deliver cash returns on capital invested.

What is your opinion, will we see a major market correction or soaring markets? Let me know about your investment style and please share your investment experiences with me and my readers, but please don’t forget (instead of hitting the reply button) to send your messages to:

smk@incrementum.li

Many thanks, indeed!

And now, Ladies and Gentlemen I wish you a great day and weekend.
 
Kind regards,

Stefan M. Kremeth
Wealth Management
Incrementum AG

Launch of new Crypto Research Report – Interview with Mark J. Valek

Posted on by Mark Justin Valek

The quarterly Crypto Research Report is the leading authority on crypto currencies and blockchain investments for financial market participants and institutions. Each issue includes exclusive interviews, statistical analysis of different crypto currencies and helpful insights into the most interesting and frequently asked questions of the time.

Content:
1:10 Market overview
2:40 Interview with Mark Valek
24:33 Flashnews
27:46 Link of the day

Launch of new Crypto Research Report – Interview Mark J. Valek
https://cryptoresearch.report/?lang

Yield or how to receive cashflows in a negative yield environment

Posted on by Stefan Markus Kremeth

Dear Ladies and Gentlemen

I received a few mails on my very provocative statement that house pets, farming and children produce an enormous amount of greenhouse gases. I was provocative on purpose. It was my intention to trigger some reactions.

I received two mails on the indirect financing of (nuclear) weapons via government bonds. It seemed most of my readers were never really looking at it that way. Fact is that you will never know what a government is doing with the money you pass on to them when subscribing to one of their bonds. They may buy weapons or build a children’s hospital with it – it is entirely up to them.

I generally receive several mails per month from readers asking me how they should invest their money to achieve the best possible results. As always, I can’t tell you and I am not allowed to give any advice to you just like that, but I am happy to elaborate quickly on what I think seems a decent strategy to still get some yield in a negative yield environment. You know, Ladies and Gentlemen, my goal always is to receive cashflow with limited volatility.

Some of my readers already know about my investment style. My investment style is real asset based and enjoys a rather large equity portion. However, the equity portion is limited to equities of companies producing positive net free cashflows and I like rebalancing the position in my clients’ portfolios from time to time.

This means I define a “normal” weighting, i.e. around 5% for any equity position in a portfolio and harvest the dividends or capital reductions the underlying company shares with its investors. If the price of an equities-position appreciates over time and thus the weighting within the client’s portfolio goes up, I will start cutting back the position down to its initial 5% weighting. If, however, the price of an investment goes down and I can’t find any dramatic change in the strategic and/or earnings perspective and the company still produces positive net free cashflows, I harvest the cashflows and increase the position until it reaches its intended weighting of 5%.

The result of this strategy is astonishing. Volatility decreases massively and performance increases.

When markets are moving up, we only capture a part of the positive performance, because we like to keep a large cash position at hand. But when markets are going down, we usually only lose a fraction of what the market loses. It is during the down moves that we generate alpha. You can have a look at the monthly development of one of our portfolios on our website.

https://www.incrementum.li/en/wealth-management/

It still needs the “right” equities and this is probably the most difficult part. Please let me know about your investment style and please share your investment experiences with me and my readers, but please don’t forget (instead of hitting the reply button) to send your messages to:

smk@incrementum.li

Many thanks, indeed!

And now, Ladies and Gentlemen I wish you a great day and weekend.
 

Kind regards,

Stefan M. Kremeth
Wealth Management
Incrementum AG