Notes from the Road 2025

Nach fast zwei Wochen in den USA, in denen wir am Precious Metals Summit (Beaver Creek) und am Mining Forum Americas (Colorado Springs) teilgenommen haben, kehren wir mit neuem Fokus und wertvollen Erkenntnissen zurück, die wir mit Ihnen teilen möchten. Diese Konferenzen ermöglichten es uns, mit den Managementteams unserer Portfoliounternehmen zusammenzutreffen und Klarheit über wichtige Entwicklungen zu gewinnen. Die allgemeine Stimmung ist konstruktiv und diszipliniert. Genau dieses Setup, Zuversicht ohne Champagner-Euphorie, ist aus Investorensicht ideal: finanzierbare Projekte, fokussierte Vorstände, vernünftige Bewertungen.

Lesen Sie im unten stehenden Dokument mehr dazu.

Two Kinds of Gold; Concluding Article in our Series on Wealth

Good Morning Ladies and Gentlemen


”To love or have loved, that is enough. Ask nothing further. There exists no other pearl to be discovered within the dark folds of life.”

Victor Hugo, Les Misérables

 

Welcome to the concluding article in our series on the intriguing topic of wealth. In our previous three articles, we have examined wealth from philosophical, metaphysical, and cultural perspectives, notably through the lens of literature. We have aimed to illuminate the multifaceted nature of wealth. This article will serve as the final chapter in our exploration, and as with the first three parts, Anton provided the text while I handled the editing.

A recent piece by DE Shaw made a compelling observation regarding wealth and its most traditional symbol: gold. In “https://www.deshaw.com/library/worth-its-weight”, the authors noted, “The growth rate of gold’s aggregate value should, over ultra-long horizons, correspond with the rate of global wealth growth.”

As one might expect, the paper refers to material wealth. Interestingly, the growth rate of wealth could be (or ought to be) mirrored in the growth rate of gold’s value. The reason why this is interesting comes once more from the article. The authors ask: “Where does the value of gold come from?”, and they answer: “[…] society has deemed [it] valuable and reasonably secure over time.”

What is not clear from DE Shaw’s piece is whether the increase in material wealth was first followed by society’s collective assent that the value of gold should represent this growth, or if it was the other way around: society deemed gold to have value, and because of this consensus, the changes in its value were taken to reflect fluctuations in material wealth. This sort of thinking may seem a tad pedantic. However, language is essential, and details matter in getting to the root of things. If we take aside the term “society”, it is impossible not to ask: What does it actually mean when we say that “society” has deemed something? It must be a metaphor for some consensus.

Unlike the scientific consensus that the earth is round, based on tested observations, the consensus underpinning the value of gold is different. Remember what we said in the first article: “value is intrinsically linked to perceptions, human psychology, economic activity, and legal systems.”

In other words, if we apply our observation on value to DE Shaw’s statement above, we shall have something like this: The changes in perceptions, human psychology, economic activity, and laws should reflect, over long time periods, the changes in material wealth. If we agree with the authors of the above article, most people will agree with this link. Once more, we can see how multifaceted the concept of wealth is. However, so far, we have spoken only of material wealth. As we argued in the previous article, in which we explored wealth from a cultural perspective through the lens of literary works, wealth goes beyond the material elements.

An interesting exercise would be to consider what benchmarks we may use to measure how much we value relationships like friendship and family and virtues like honour and honesty. If the value of gold is to be a benchmark for material wealth, how could we measure non-material wealth? Would there also be a societal consensus about these measurements?

Perhaps our personal happiness and fulfilment in life are the benchmarks for wealth? If we are to take the studies highlighted by the American Psychological Association, then our own happiness is a benchmark for the wealth that friendship relationships bless us with. And if we are to take Plato’s words, as recorded in “The Republic” and “Philebus”, then indeed a person of virtue would be a happy, wealthy man or woman. For Plato, true happiness was impossible without virtue.

However, studies show that people, especially the young, are increasingly less happy despite growth in material wealth. For example, the recent World Happiness Report found this to be true in the United States. Meanwhile, young and old Americans have gotten materially wealthier, at least according to a recent article by the New York Times. We can see a similar trend across other nations if we dig further.

Why this apparent discrepancy between happiness and richness? Material wealth growth also means immaterial wealth growth, if happiness is a benchmark for the latter. However, that point differs from individual to individual because lifestyles and consumption habits are not the same for all. The conclusive point is that there is a point in a person’s life when more material wealth does not mean more happiness.

Throughout this series, we have essentially tried to argue that there is more than one kind of gold by looking at the concept of wealth more deeply. There is the tangible asset, labelled DE Shaw with the acronym NPSOV (which, despite its unfriendly look, stands for non-productive store of value). Then there is the intangible asset, the invisible type of gold: friendship, virtue, love.

Dare I say it is the latter kind of intangible gold that ought to be valued more? After all, what good is it to have all the world’s riches but nobody to share it with?

For the world to be truly wealthy, material possessions will not suffice; the voice of the world’s greatest literary authors from ancient times to today is in complete accord. The reason for this is that wealth is closely linked to the nature of the human person, as we have argued in the second article of this series, and the human person needs more than material possessions to feel (and to be) truly wealthy: we need one another, we need love.

Thank you all for reading.

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

Hello, again! – Das iPhone/Gold-Ratio 2025

Hello, again! – Das iPhone/Gold-Ratio 2025

Die vergangenen 12 Monate waren für Tim Cook, den CEO von Apple, turbulenter, als es ihm lieb war. Die umstrittene und erratische Zollpolitik von Donald Trump hat auch auf Apple große Auswirkungen. Überraschenderweise haben die Zölle jedoch nicht zu einer Preiserhöhung in US-Dollar geführt. Der Preis des iPhone 17 Pro Max mit 1 TB Speicher beträgt wie im Vorjahr 1.599 USD. Goldanleger erfreuen sich dagegen über das billigste iPhone allerzeiten. So kostet das iPhone 17 Pro Max mit 1 TB Speicher lediglich 0,46 Unzen Gold. 2022 mussten noch 0,87 Unzen Gold gezahlt werden, 2023 0,78 Unzen und 2024 0,64 Unzen. Im Vergleich zum in Gold mit Abstand teuersten iPhone XS, für das 2018 stolze 1,13 Unzen Gold hingelegt werden mussten, beträgt der Preisrückgang fast 60%. Der Grund für diesen Preisverfall liegt auf der Hand. Per Ende August legte Gold auf US-Dollar-Basis im Vergleich zum Vorjahr um 37,8% zu, im Vergleich zu 2023 um 80,2%.

From Interest Rate Cuts to Constraints in Diplomacy

Good Morning Ladies and Gentlemen


”In the real world, nothing happens at the right place and time. It is the job of journalists and historians to correct that.”

Mark Twain 

 

The Financial Times reported that for individuals purchasing health insurance in the U.S. through government exchanges, the median increase in 2026 is 18%, more than double last year’s rise of 7%. Simultaneously, we’ve received the most significant negative revision to U.S. employment statistics, with nearly a million jobs adjusted downward.

Rate Cuts by the U.S. Federal Reserve

On Wednesday, the US Federal Reserve reduced interest rates by a quarter of a percentage point, bringing the new range to 4.00% to 4.25%, which investors anticipated. This marks the first change in interest rates since December 2024. During the announcement, Jerome Powell described the decision as a ‚risk management rate cut‘. The Fed also signalled expectations for two additional rate cuts of 25 basis points each at its upcoming meetings in October and December, a forecast supported by market expectations. Looking at the two-year U.S. Treasuries, the Fed seems to be still behind the curve. Why is this the case, you may ask?

The Fed’s Dual Mandate

Powell reiterated the Fed’s dual mandate of maintaining price stability and supporting the labour market, describing the balancing act as challenging given that inflation remains above the target level. The target inflation rate is 2%, but the current rate is 2.9%. This is probably the best explanation for why the Fed still seems behind the curve. Regarding inflation, examining grocery item price fluctuations reveals significant year-over-year increases in various categories. For instance, coffee has experienced a remarkable escalation of 20.9%, while steaks have risen by 16.6%. Furthermore, apples and bananas have seen increases of 9.6% and 6.6%, respectively. Notably, these price adjustments occur although less than 50% of tariff-related costs have been transmitted to consumers thus far. This trend underscores the complexities of supply chain dynamics and consumer pricing in the current economic landscape.

Future Interest Rate Path in the U.S.

A likely future interest path in the U.S. Looking ahead to 2026, the Federal Reserve anticipates only a single rate cut, while the futures market predicts three. Following Wednesday’s 25 basis point cut, the market has assigned high probabilities of 88% and 82% for further rate reductions in October and December, respectively.

The Bank of England

The Bank of England, in contrast, chose not to lower interest rates during today’s meeting, citing persistently high inflation in the UK. The monetary authorities maintained the key rate at 4.00%. Nonetheless, the decision by the Bank of England’s (BoE) Monetary Policy Committee (MPC) sparked internal controversy, with seven members voting for the decision and two against it. Monetary policymakers Swati Dhingra and Alan Taylor advocated for a rate cut. Following the easing measures implemented in August, the BoE refrained from taking additional steps, largely due to ongoing inflationary pressures. Central bank governor Andrew Bailey remarked, „We expect inflation to return to our 2% target, but we are not out of the woods yet. Any future cuts must, therefore, be gradual and cautious“.

Today’s Quote

Today’s quote, “In the real world, nothing happens at the right place and time. It is the job of journalists and historians to correct that,” carries a significant philosophical weight. Was Mark Twain being cynical, ignorant, or far-sighted? Personally, I believe that, unfortunately, in many instances, journalists prioritise moral-ethical arguments over pure fact-based reporting. In political discourse, I seek less personal opinion and more factual information, but I rarely find it. Conversely, political leaders and journalists seem increasingly willing to dismiss anything that does not align with their narrative. I find this troubling, as the absence of freedom of expression stifles political competition and constrains diplomacy. This is a precarious situation because, in a democratic environment, diplomacy serves as a means of civilising conflict and revolution. Think about it.

Next Week

Next week, we will publish the fourth and final instalment of our four-article series, which has been unfolding over the summer. In collaboration with my friend Anton, who resides in Oxford (UK) and works in the financial services sector, we have been examining the familiar term “wealth” to gain a deeper understanding of its meaning.

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

O’zapft is! – Das Gold/Wiesnbier-Ratio 2025

O’zapft is! – Das Gold/Wiesnbier-Ratio 2025

In wenigen Tagen, am Samstag, den 20. September, ist es wieder so weit. Dann wird mit dem traditionellen Bieranstich das 190.Münchner Oktoberfest eröffnet. Die ausgelassene Stimmung auf der Theresienwiese wird allerdings weiterhin durch den Blick auf den Bierpreis getrübt. Dieses Jahr kostet eine Maß Wiesnbier bis zu 15,80 EUR und damit um 3,3% mehr als noch 2024. Goldanleger haben allerdings keinen Grund zur Klage, denn der kräftige Anstieg des Goldpreises in den vergangenen 12 Monaten mit zahlreichen neuen Allzeithochs füllt trotz der abermaligen Preiserhöhung in Euro immer mehr Maßkrüge. Mit 186 Maß Wiesnbier pro Unze Gold kann sich der Goldanleger gleich um 38 Maß mehr leisten als 2024. Das entspricht einem Anstieg um mehr als 25% gegenüber dem Vorjahr! Im Vergleich zu 2023 können Goldanleger 67 Maß mehr kaufen, das ist ein Plus von 56%. 

2025 Year-End Competition; an Update

Good Morning Ladies and Gentlemen


”The greatest mistake you can make in life is to be continually fearing you will make one.”

Elbert Hubbard 

 

The first article in our series exploring a broader conceptualisation of wealth was published in Executive Global Magazine. Just in case you feel like spending a moment reading it, feel free to click on the following link:

A Philosophical Approach To Wealth – Part I – Incrementum

Update

Anyway, I thought it would be a good time to provide an update on the Incrementum 2025 Year-End Competition. As I write this edition of „Stefan’s Weekly,“ the prices are as follows: silver is USD 41.49, the Shanghai Composite is 3,812.22 points, and the 10-year U.S. Treasury yields 4.12%.

Silver

No modifications have been made to our „betting landscape“ thus far. Hans continues to hold 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 take that one home on December 31, 2025.                 

Shanghai Composite

The same principle applies to the Shanghai Composite Index, where my associate, 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  

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%. Again, this disparity highlights a significant divergence in the gentlemen’s expectations regarding future interest rates and, thus, economic conditions. To me, this is still the most interesting bet. I am curious if we will see inflation kick in before year-end.

Closed Competition

The competition has officially closed, and I appreciate your understanding.
Data will be sourced from https://marktdaten.fuw.ch/.

Fingers Crossed  

I’m keeping my fingers crossed for all participants, and I look forward to sending the winner this one-ounce silver coin at the end of the year.

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

Politics’ Possible Influence on Capital Expenditure

Good Morning Ladies and Gentlemen


”And I’ll keep my cool, but I’m feigning.”

Macy Gray in her iconic song “I Try”

 

An editor at the Frankfurter Allgemeine Zeitung newspaper once coined the term ‘insufficiency terrorists’ (Insuffizienz-Terroristen) to describe a phenomenon. It refers to managers who fail to recognise their shortcomings and force those around them to adapt to their weaknesses. What causes frustration in companies and leads to economic decline becomes a national threat in the government apparatus. Incompetent ministry leadership can plunge an entire state into chaos.

A Slump in Corporate Earnings

Regrettably, we do not reside in a perfect world, and we acknowledge that. While many people remember the global financial crisis, they tend to overlook that from 2000 to 2002, corporate earnings fell by 40%, much like during the global financial crisis. The question is, why did this downturn happen?

The Reason

The primary cause of this downturn was the significant reduction in capital expenditure (capex) in 2001, which resulted in an immediate and sharp decline in earnings. When investment spending came to a halt, earnings followed suit without delay. Business leaders require a baseline of rule-based political and economic stability to feel assured that investments in new production facilities, infrastructure, information technology, and workforce development will yield positive returns over time. I am concerned that the current U.S. administration may be somewhat dogmatic regarding tariffs and may not fully recognise the associated economic risks.

Share Price Valuation

What do you think would occur with share prices, indices, and so on if corporate earnings were to decline significantly by 40%, similar to what happened 24 years ago? I assume that valuations would need to be recalibrated to reflect this new reality, which includes lower earnings and growth potential, potentially resulting in a contraction of the price-to-earnings (P/E) ratio.

Futhermore

In addition, BCA (Bank Credit Analyst) Research asserts that tech-related capital expenditures have peaked. I strongly believe as of now, this perspective is not reflected in Nvidia’s current stock price. Analysts are predicting a 35% revenue growth over the next several years. As noted by The Financial Times, even if these projections are met, it remains challenging to justify the existing valuation: “If you sum the analysts’ estimates of free cash flows for the next five years and discount them back at a 10% rate, the total comes to only $650 billion. This implies that the remaining $3.8 trillion in enterprise value represents cash flow from 2030 onward.”

Conclusion

In response to the imperative for prudence and in recognition of the commendable performance demonstrated to date during the current fiscal year, we have implemented a strategic reconfiguration of the portfolio structure within our Private Client division. This adjustment encompasses the realisation of profits and a heightened allocation of liquid assets, aimed at mitigating the risks associated with what can be characterised as ‚insufficiency terrorism‘ in financial management.

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