Autor: Stefan Markus Kremeth

Dear Ladies and Gentlemen

Gold does not shine this year, and whether you believe it or not, I receive many inquiries, messages and sometimes mails that show an inevitable frustration. While I understand people being frustrated about staying in an asset class that is not moving up while everything else seems to perform well, after all, we live in a „relative to expectations world“, I do not see it as our responsibility to make gold move in the «right» direction, only because we are the producers of the «In Gold we Trust» report. Last year and the year before, gold performed well and maybe what we see this year is just a consolidation.

In Gold we Trust (IGWT)

Yes, we publish the Incrementum Gold Report (IGWT) every year, and yes, it is written positively, and yes, gold currently does not rise. This may be very unfortunate, but it is also part of the game of investing. We are in it for the long-term, and speculation is not our business, and yet, Ladies and Gentlemen, the reason why we are positive on gold in the long-term has not changed one bit. We regularly publish our opinion and explain in detail why we do believe in our conclusions. As a matter of fact, my partner Ronni Stöferle was holding a keynote at a conference in the U.S. yesterday on the topic, and according to the feedback I gathered, it was very well received.

Drivers of the gold price

One would assume, free liquidity for almost everyone, cheap money, i.e. low interest rates and low bond yields, political tensions, inflationary pressure, would, under normal circumstances, lead to higher prices in precious metals. Instead, however, equities are up, cryptocurrencies are up, even bonds are up, only gold is performing disappointingly.

Why?

During our investment committee meeting last week, we were indeed discussing this year’s underperformance of gold.

So, Ladies and Gentlemen, what do you think, why is gold not moving up? I am sure all of you have some ideas for it, and I would be pleased to receive your feedback.

Is it maybe a simple question of competition of funds, or are cryptocurrencies taking the role of gold among younger investors and proposing far better speculative returns? What are the reasons?

Your call!

This is your call, Ladies and Gentlemen; please send me your concise ideas. Your opinion counts. I will consolidate your views and publish them in my next weekly mail.

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, a wonderful weekend, and above all, good health!

Yours truly,

Stefan M. Kremeth
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

Dear Ladies and Gentlemen

In his book „The Enigma of Room 622“, Joel Dicker writes, „success is the pleasure of working together“. This very well describes a part of my way of thinking. It gives me great pleasure to achieve prosperity for our investors‘ thanks to the personal exchange and cooperation with different people and by trying to stay as calm as possible in sometimes crazy times.

Normal Volatility

For more than one year, ever since the covid outbreak in Q1 2020, «calamity predicters» call for a crash. Still, no crash to be seen but plenty of opportunity costs for those not invested. Volatility in traditional asset classes is within a standard range. This, of course, does not mean there will not be a slump or crash in the market eventually, but it mainly means that it probably makes sense not to keep all eggs in one basket and invest for one scenario, only.

Why

Why would I mention this? Because to me, it is exemplary on how I try to approach research, podcasts, youtube videos, newspapers, etc. When reading research or listening to people’s podcasts, youtube videos, and the like, the most crucial question is «why». Why does the analyst, journalist, podcast or video producer communicate what she/he is communicating? What may be the motivation? If you can get a vague idea of the «why», you have a higher chance of gauging the conclusion and setting it in relation to your own views and ideas.

My Motivation

Ok, «so, Stefan, what is your motivation»? You may think. To be as transparent as possible, I am happy to elaborate on my motivation to write a weekly mail to my subscribers for free. It is simple, over a year, I receive a fair amount of feedback, and in many cases, the feedback helps me calibrate my own views and beliefs. In other words, true, I produce free content, but also true, I receive free feedback. So on one side, I see it as a win-win for my readers and myself, and on the other side, it gives me genuine pleasure to write just about every topic I want, when I want.

Joel Dicker

To me, „success is the pleasure of working together“! So I think Joel Dicker is right! Furthermore, I am privileged to share my thoughts with people worldwide and receive feedback from people from all over the world with sometimes very different perspectives.

Your view counts!

How do you approach research, podcasts, youtube videos, newspapers, etc?
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, a wonderful weekend, and above all, good health!

Yours truly,

Stefan M. Kremeth
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

Dear Ladies and Gentlemen

This year’s year-end competition shows an interesting picture.

Extremes

As you will see, the volatility in the individual underlying’s market prices is somewhat represented in the spread between the highest and lowest of your estimates for gold, Bitcoin and the S&P 500. However, there are still estimates dropping in every day; thus, I will only calculate the weighted average for each category in a few weeks from now. So far the picture is the following:

Gold

The range in gold stretches from USD 1’650 to USD 2’066, with roughly half of the estimates hovering around 1’850. Thus, my readers seem not too bullish on gold but slightly optimistic.

Bitcoin

The range in Bitcoin stretches from USD 23’000 to USD 87’000. Now, for Bitcoin, the picture is very much different than for gold. So far, roughly half of the estimates lie above USD 70’000, which shows my reader’s great confidence for higher prices in Bitcoin.

S&P 500

The range in the S&P 500 stretches from USD 3’835 to USD 5’048. However, half of the estimates came in lower than today’s market price, and half of the estimates came in above today’s market price.

Conclusion

Hitherto, it seems most of you are bullish on Bitcoin, slightly positive on gold and neutral on the S&P 500.

My Prediction

Some of you had noticed that, unlike in the past years, I had not yet given my prediction. True, I was always the first one to show my cards. However, this year I kept them close to my chest because I did not want to influence anyone in any way.

I forecast that gold will close at USD 1’900, Bitcoin will close at 66’000 and the S&P 500 at 5’100.

As always, please share your opinion with me, but please do not forget (instead of hitting the reply button) to send your messages to:… 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, good health!

Yours truly,

Stefan M. Kremeth
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

Dear Ladies and Gentlemen

For those who have joined our readers recently, every year, I am organising a year-end competition in guessing for example the price of gold, silver, crude oil, the SMI or the S&P 500 Index.

Predictions

Regularly, I receive emails from readers asking me where I think the price of gold would be at the end of the year or the SMI or interest rates or the price of silver. Those who follow my weekly emails frequently will know, that I would not say I like making predictions.

Invitation

However, from time to time, I am happy to tell you what I think may happen just for fun, and since we are in August already, it is time for our traditional year-end competition. Like I did in the past, I invite you to compete with all the other readers and myself, and as always, the winner will receive one ounce of silver in the form of a silver coin. If the winner stems from within Incrementum or my family. I am happy to send a one-ounce silver coin also to the second in place.

Former Winners

The list of former winners includes an old friend from university, a client, a former fund manager and value specialist from London and regular readers. So far, no family members and none of my partners were close enough to be called winners. It is difficult if not impossible to guess the future and yet I am looking forward to your bets!

Gold, Bitcoin, S&P 500

Now, Ladies and Gentlemen, I suppose we try to guess the year-end price for one ounce of gold in USD, the S&P 500 and (for the first time) Bitcoin in USD. All cash, no futures. The closest one wins the silver coin. The year-end prices will be taken from this page:
https://marktdaten.fuw.ch/.

Ladies and Gentlemen, what do you think? What is your best guess for the year-end prices of gold, the S&P 500 and Bitcoin. 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, a wonderful weekend, and above all, good health!

Yours truly,

Stefan M. Kremeth
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

Dear Ladies and Gentlemen

From an economic perspective, the factors of production include land or its natural resources, capital, labour, and, I would argue, knowledge. Now, I have a fair amount of discussions with people of different backgrounds about the importance of capital, i.e. investments.

Something Neglectable

…and occasionally I almost do get the impression that in some people’s minds, capital is not seen as an important economic production factor but essentially as something neglectable, something close to being ashamed of. I do not understand why one could argue like this. Please allow me to share my thoughts with you.

Misunderstanding – Capital is Key

When talking to people, I often sense some socio-economic misunderstanding concerning «capital» and investments. Not considering capital as an essential economic factor ignores the fact that an economy’s stakeholders could not invest in land, labour and knowledge, produce and offer services, conduct research, drive innovation, promote and accumulate knowledge without capital. Capital is key! In other words, without the production factor capital, the other production factors are not or only marginally available. Therefore, investors, i.e. capital providers, are of crucial economic significance, which some political groups and probably even many participants in an economy, unfortunately, seem to underestimate.

Thank you!

Thanks to investors like you (people who are willing to accept risk and provide capital to companies), economies may prosper, create jobs, wealth and social security. Investors are doing something utterly important by providing capital, i.e. by investing. Investing is an active and productive attitude. If investors kept their money (capital) under a mattress in their bedrooms, this would be a passive attitude and not help any economy whatsoever.

Ladies and Gentlemen, you can be proud of supporting various economies with your capital, and I consider it self-evident that you are compensated for the risk you are taking with a return on your capital invested. Thank you!

Ladies and Gentlemen, what do you think, what is your opinion? Please let me know your thoughts.

… 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, good health!

Yours truly,

Stefan M. Kremeth
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

Dear Ladies and Gentlemen

Every quarter, I am reporting to our private clients on an individual basis. I thought it might be of interest to you to receive excerpts from the latest reporting. I left all individual comments away and the part about changes to the individual portfolios.

Introduction

The second quarter of 2021 was convincing on many markets with a positive performance and a pleasing personal portfolio development. On the other hand, the stock markets were increasingly characterised by nervousness and volatility. Inflation worries, growth worries, political worries, Covid 19 variant worries, worries about vaccination side effects, vaccination refusers, worries about societal upheaval, etc.

Extraordinary Times?

From ordinary citizens to big investors, there seem to be people who just do not want to miss the opportunity to wallow in any worry, often strongly supported by new and old media channels that can hardly be surpassed in terms of irresponsibility. I do not want to judge, but I cannot always understand this. For us, extraordinary times is the new normal and, therefore, part of our business. However, the line between normality and calamity is thin, and it never ceases to amaze me how little we are aware of it.

Volatility

On the one hand, this is exhausting for us asset managers, as all these concerns can lead to short-term volatilities in individual stock corporations, sectors or entire markets. But, on the other hand, volatilities can also unsettle our investors and possibly trigger new (additional) worries for them.

Long-Term Chances

For us asset managers, however, all these concerns also offer opportunities to make acquisitions for our investors at attractive prices. After poor quarterly results, we have taken the opportunity to build up positions in companies with a solid business model offering the possibility of generating positive cash flows over the economic cycle while showing a willingness to share their cash flows with investors.

Prepare, Sow, Foster, Harvest

This way of investing is a bit like planting seeds. Prepare, sow, foster, harvest. So we sow now and harvest in nine to twelve months. We also have taken profits in some stocks, and we have already repurchased one or the other of those at lower levels.

Equities?

It still looks to us as if there is no way around equities. Interest rates remain low; inflation is likely to be more of a temporary issue. Even if not, it would not automatically lead to a dramatic rise in interest rates by central banks. Therefore cash flows can currently only be generated through equities.

Outlook

At present, I remain cautiously optimistic for the coming months. Of course, I cannot rule out the possibility of profit-taking and even distortions, but I believe these will only occur in the short term and in stretches and yet again and as I have mentioned above, the line between normality and calamity is thin and this is why it makes sense to always keep in mind what my partners Ronni and Mark publish once a year in Incrementum’s „In Gold we Trust“ report and just in case you would have missed this year’s edition, please feel free to use this link:
Full Version – English  (346 pages).

Ladies and Gentlemen, please let me know your thoughts.

… 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, good health!

Yours truly,

Stefan M. Kremeth
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

Dear Ladies and Gentlemen

This week’s Incrementum advisory board meeting, hosted by my partner Ronni Stöferle, was all about uranium as a source of energy, undoubtedly a controversial topic for many people. Incrementum’s Chairman, Dr Christian Schärer, held a presentation on the subject.

Key Argument

The investment case for uranium as a source of energy is based on compelling arguments, of which I would like to share the most important with you. For those interested in the other arguments and the presentation by Christian, please feel free to click on the link below to have full access to the video of the advisory board meeting, including the presentation on uranium as a source of energy.

A Question of Supply and Demand

It probably will not come as a surprise to you, but supply and demand make up the most powerful argument for an investment case in uranium as a source of energy. Besides that, nuclear power plants do not produce CO2.

Supply Side

Ever since 2016, the supply side has seen a cut in production of roughly 25% due to low uranium prices.

Demand Side

The shock after the Fukushima nuclear power plant catastrophe has led to shrinking demand for many years, and only recently the demand side became increasing, however with relatively high visibility and still for many years to come. Why would I say this? Because currently, 443 reactors are being operated globally. Fifty-five reactors are currently under construction. Another 100 reactors are in the planning phase, and some 325 reactors are in a «proposal phase».

Link

Ladies and Gentlemen, please feel free to get an in-depth picture of a market few people really know something about from an expert within the Incrementum team. Christian is researching uranium for well over ten years, and he is happy to answer your questions.

Please enjoy the show:
https://www.youtube.com/watch?v=z1s0l0J-ewc

Ladies and Gentlemen, please let me know your thoughts.

… 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, good health!

Yours truly,

Stefan M. Kremeth
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

Dear Ladies and Gentlemen

I received some messages to my last weekly mail and one, by Jan, was extraordinary in the sense that it contained questions of great deepness. I am not sure if I have been able to reply to Jan expectedly, but even if not, it was inspiring to me thinking about the questions and sharing my humble points of view.

Why am I telling you this? Because I want to encourage you to share your questions and thoughts as they help me thinking about aspects of our business, I would perhaps miss otherwise.

Nassim Taleb on cryptocurrencies

I have tried to elaborate on the value of cryptocurrencies in the past, and there are many different points of view. While we do not necessarily agree with everything Mr Nassim Taleb comes up with, we have referred to him on various occasions and in various publications. Nassim Taleb has been known as a big fan of Bitcoin.

However…

Link

It seems Mister Taleb has changed his point of view. I personally do not entirely agree with his paper, yet I think it is worthwhile reading it, which is why I encourage you to check it out.

For this, please find the following link to his latest thoughts on «Bitcoin, Currencies, and Fragility.»

Please enjoy the read :

BTC-QF.pdf (fooledbyrandomness.com)

Holidays

Ladies and Gentlemen, I will be on vacation for a few days and therefore not publish a «Stefan’s weekly» next week. The next regular issue can be expected for Friday, July 23, 2021. Until then, I wish you a great summer and hopefully some sunshine. Despite my vacation, please let me know your thoughts.

… but please do not forget (instead of hitting the reply button) to send your messages to smk@incrementum.li

Many thanks, indeed!

Ladies and Gentlemen, I wish you an excellent start to the day, a wonderful weekend, and above all, good health!

Yours truly,

Stefan M. Kremeth
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

Dear Ladies and Gentlemen

Many thanks for your messages and for sharing some of your investment ideas and concerns with me. Bob, John, Tom, Roger and Peter thank you very much for your extensive messages!

Thoughts on Cash

The following thoughts I have shared in one way or the other with some of my readers. Given the circumstances and current market conditions, I genuinely think a certain level of cash does not hurt. Tom also let me know that he is building up cash by selling into the strength. If the market or individual stocks are going to correct, cash can help to acquire positions at compelling prices.

Thoughts on Market Timing

However, in general, investors should stay invested (there is tons of statistical data showing that long-term performance is becoming more attractive by staying invested than by trying to time markets). While the investment style may change according to the risk profile or whatever preferences an investor may have, investors should thus and according to statistics, stay invested at least partially. Now, this is fine for me, and it is what we are doing in our private clients‘ mandates.

Thoughts on Cash-Flow

However, I like positive cash-flows and companies that share positive cash-flows with their investors. Because if an investor can harvest dividends regularly and long term, the underlying price of the investment becomes somewhat less important. This, of course, given that the company’s future cash-flows will cover future dividends. Thus, to me, investing also means finding companies that will offer sustainable net free cash-flows even during difficult market conditions. Yet, because even stocks of such companies may suffer from setbacks during a crash, investors with cash have the opportunity to buy more of the same and hence harvest ever more dividends in the years after that. I very much like the effect of compounding positive cash flows in our private clients‘ mandates.

Thoughts on Bond Yields

I was asked why the 30-year treasuries‘ yields went down. Well, in the aftermath of the Fed meeting, yields rose at the short end and fell at the long end. This movement can be called a bearish flattening of the US yield curve and may be considered a leading indicator of a contracting US economy. Why is that? A flattening of the yield curve is consistent with the finding that interest rate movements at the long end are driven by economic conditions, which in turn are partly due to central bank actions. Which is what the market is currently pricing in. Because if the US central bank tightens the reins, i.e. QE reduction, interest rate hike (as market participants currently believe the Fed will do), and thus reduces liquidity, the probability of a weaker economic development in the future increases. A weaker economic development in the future causes interest rates to fall at the long end.

Please, Ladies and Gentlemen, let me know your thoughts!

… but please do not forget (instead of hitting the reply button) to send your messages to smk@incrementum.li

Many thanks, indeed!

Ladies and Gentlemen, I wish you an excellent start to the day, a wonderful weekend, and above all, good health!

Yours truly,

Stefan M. Kremeth
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

Dear Ladies and Gentlemen

Please let me start this week’s edition of „Stefan’s weekly“ with a short administrative message on the publications front of Incrementum AG.

LinkedIn

I do not know if you know, but Incrementum AG has a LinkedIn account. If you are interested in reading regular posts from the partners of Incrementum AG, please feel free to follow us on LinkedIn.

Still no crash detectable

Ladies and Gentlemen, I receive many questions on how to invest and on if the market is going to crash and if we will see massive inflation. The fact is I can not foresee the future, but let me give you my point of view.
I know there is risk, i.e. volatility, in equities, and many companies‘ valuations seem expensive, and all major Dow indices (Industrial, Transport, Utilities) showed relative weakness in the last week, and I would not rush in and buy stocks across the market franticly, but if you see an opportunity, why not starting the building up of a position?

What is the alternative?

We see oil with unwavering strength, and the trend in the Nasdaq 100 futures remains up and if we consider bonds a no-go, where to put the cash? Well, first of all, I am a big fan of cash. When markets are shaky for a few days, weeks or even months, cash comes in handy and can help build up positions at reasonable prices. However, I am also a big fan of equities. Long-term, it makes sense to me to be and to stay invested in equities of companies producing positive cash-flows without trying to time the market too much. Market timing is challenging, and few people do get it right.

Risk Assets

In any case, investing in so-called „risk assets“ involves primarily the capacity of handling risk, i.e. the capacity of accepting volatility. People are different and thus feel different about accepting risk. That is why a portfolio should always be structured according to your personal desires, needs and your very personal risk appetite.

What is your way of managing assets?

Please, Ladies and Gentlemen, let me know about your experiences in asset management. What is important to you, and how do you handle risk? Do you think the market is a ticking time bomb?

… but please do not forget (instead of hitting the reply button) to send your messages to smk@incrementum.li

Many thanks, indeed!

Ladies and Gentlemen, I wish you an excellent start to the day, a wonderful weekend, and above all, good health!

Yours truly,

Stefan M. Kremeth
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