Autor: Stefan Markus Kremeth

Interview mit Chris Marcus von „stockpulse“ (How To Keep Making Money in Volatile Markets mit Stefan Kremeth)

Posted on by Stefan Markus Kremeth

Dear Ladies and Gentlemen

Today I would like to share a 20 minutes video from an interview I gave to Chris Marcus from stockpulse (www.stockpulse.com). I hope you will enjoy it and if you do, I would appreciate if you did “like” the video on youtube.

Please do not hesitate to share your thoughts with me on the interview or on whatever seems interesting or bothering to you. Please feel encouraged to do so 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

Ein faszinierendes Missverständnis über Gold

Posted on by Stefan Markus Kremeth

Dear Ladies and Gentlemen

Many thanks for the encouraging messages I received to my last weekly mail containing a link to the latest edition of our Incrementum Crypto Research Report. My colleagues from the Incrementum Crypto-Team have again invested a lot of time and effort to make it a worthy product. If you have not had the chance to look at it, maybe you do want to spend a moment to do so over the weekend, I think it is well worthwhile.

Now, for this week I would like to look at what is happening at financial markets right now. You know, the large European indices don’t look so cool with the SMI being down 7.92% so far this year, the DAX down 10.67% and the EuroStoxx standing at minus 8.41% year-to-date.

What is happening you may ask. Is this just a healthy correction, a crash or the beginning of a bear market?

First, I personally think there is not much wrong on the corporate side. Almost all companies we are screening have reported decent numbers so far this year, some of them even reported very good numbers.

Second, statistically the fourth quarter in U.S. mid-term election years, such as 2018, is usually a positive one for U.S. equity markets. Yet (and we have to keep that in mind) those statistics only show a picture of aggregated numbers and while the aggregated numbers may show a positive result over time, individual years may still be negative.

Third, investors are worried about higher yields. Large US bond ETFs have taken quite a beating lately.

Forth, the general news flow seems somewhat tilted towards the negative. According to mass media we seem to see more and more tensions stemming from global political leaders and other global political forces.

Well, Ladies and Gentlemen, this somewhat kills the vibe, no? In such an environment, investors are just not willing to commit for the purchase of equities, investment funds, ETFs, etc.

…and to answer the initial question if this is just a healthy correction, a crash or the beginning of a bear market, I can only answer that: “I don’t know!”, as I can’t possibly foresee the future which I admit is a pity but nevertheless a fact.

However, if you are in the game for the long run and you have done your due diligence before investing and you are convinced to have the right stocks in your portfolio, during periods like this you may want to consider buying more of the same at lower prices.

…and it pays off to keep a reasonably balanced portfolio. For example, look at the performance of gold over the last few days. If you have a small allocation of gold in your portfolio it must have added positively to the total return during the last days and thus took some of the negative volatility out of your portfolio

Diversification helps during difficult times but in order to have a diversified portfolio for difficult times you may want to consider building it up while markets still look healthy.

And now, Ladies and Gentlemen, please keep in mind that I can’t foresee the future and whatever I am sharing with you in my weekly mails reflects my very own personal opinion and please keep on sharing your thoughts and ideas with me. Please feel encouraged to do so but please don’t forget (instead of hitting the reply button) to send your messages to:

smk@incrementum.li

Many thanks, indeed! Your comments keep me going!

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

Kind regards.

Yours truly,

Stefan M. Kremeth
Wealth Management
Incrementum AG

Stefan’s weekly: Gesunde Korrektur, Crash oder Bärenmarkt?

Posted on by Stefan Markus Kremeth

Dear Ladies and Gentlemen

Many thanks for the encouraging messages I received to my last weekly mail containing a link to the latest edition of our Incrementum Crypto Research Report. My colleagues from the Incrementum Crypto-Team have again invested a lot of time and effort to make it a worthy product. If you have not had the chance to look at it, maybe you do want to spend a moment to do so over the weekend, I think it is well worthwhile.

Now, for this week I would like to look at what is happening at financial markets right now. You know, the large European indices don’t look so cool with the SMI being down 7.92% so far this year, the DAX down 10.67% and the EuroStoxx standing at minus 8.41% year-to-date.

What is happening you may ask. Is this just a healthy correction, a crash or the beginning of a bear market?

First, I personally think there is not much wrong on the corporate side. Almost all companies we are screening have reported decent numbers so far this year, some of them even reported very good numbers.

Second, statistically the fourth quarter in U.S. mid-term election years, such as 2018, is usually a positive one for U.S. equity markets. Yet (and we have to keep that in mind) those statistics only show a picture of aggregated numbers and while the aggregated numbers may show a positive result over time, individual years may still be negative.

Third, investors are worried about higher yields. Large US bond ETFs have taken quite a beating lately.

Forth, the general news flow seems somewhat tilted towards the negative. According to mass media we seem to see more and more tensions stemming from global political leaders and other global political forces.

Well, Ladies and Gentlemen, this somewhat kills the vibe, no? In such an environment, investors are just not willing to commit for the purchase of equities, investment funds, ETFs, etc.

…and to answer the initial question if this is just a healthy correction, a crash or the beginning of a bear market, I can only answer that: “I don’t know!”, as I can’t possibly foresee the future which I admit is a pity but nevertheless a fact.

However, if you are in the game for the long run and you have done your due diligence before investing and you are convinced to have the right stocks in your portfolio, during periods like this you may want to consider buying more of the same at lower prices.

…and it pays off to keep a reasonably balanced portfolio. For example, look at the performance of gold over the last few days. If you have a small allocation of gold in your portfolio it must have added positively to the total return during the last days and thus took some of the negative volatility out of your portfolio

Diversification helps during difficult times but in order to have a diversified portfolio for difficult times you may want to consider building it up while markets still look healthy.

And now, Ladies and Gentlemen, please keep in mind that I can’t foresee the future and whatever I am sharing with you in my weekly mails reflects my very own personal opinion and please keep on sharing your thoughts and ideas with me. Please feel encouraged to do so but please don’t forget (instead of hitting the reply button) to send your messages to:

smk@incrementum.li

Many thanks, indeed! Your comments keep me going!

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

Kind regards.

Yours truly,

Stefan M. Kremeth
Wealth Management
Incrementum AG

Incrementum Crypto Research Report – Oktoberausgabe

Posted on by Stefan Markus Kremeth

Dear Ladies and Gentlemen

Our Crypto-Team just published the latest issue of the Incrementum Crypto Research Report, please have a look at it:

Bitcoin has entered its third bear market that has lasted over six months. The year-to-date return is roughly -50 %, although, the year-over-year return is about +150 %. This edition concludes our first year of publications, and we are excited to embark on our second year of writing the Crypto Research Report with our newest Premium Partner, Bitpanda, one of the largest cryptocurrency brokerages in the world.

Exclusive interview with Liechtenstein’s Prime Minister, Adrian Hasler: Liechtenstein’s new „Blockchain Gesetz“ describes how tangible assets can be tokenized and traded on public blockchains. The world’s first regulated security token was approved by Liechtenstein regulators in September.
Smart Contracts: Utility coins underperformed payment coins during the last year; however, some utility coins have a bright future. In our Coin Corner chapter, we compare Ethereum, NEO, and the newly released EOS. Despite a rocky launch, EOS‘ strong legal and development team in the U.S. is garnering investor attention.
How to Value a Cryptocurrency’s Fundamental Value: Our network calculations overwhelmingly indicate that the cryptocurrency market is still overbought, and according to this valuation method further corrections could be ahead.

The Incrementum Crypto Research Report can be downloaded from the following links:

Crypto Research Report – (73 pages) – English
Crypto Research Report – (81 pages) – Deutsch

And now, Ladies and Gentlemen, please keep on sharing your thoughts and ideas with me. Please feel encouraged to do so but please don’t forget (instead of hitting the reply button) to send your messages to:

smk@incrementum.li

Ladies and Gentlemen I wish you a great day and weekend.

Kind regards.

Yours truly,

Stefan M. Kremeth
Wealth Management
Incrementum AG

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 102
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li
Web: www.incrementum.li

Warum würdest du auf nur ein Szenario setzen?

Posted on by Stefan Markus Kremeth

Dear Ladies and Gentlemen

If you do want to receive this weekly message in future, you will have to confirm your subscription under:

https://www.incrementum.li/publikationen/incrementum-newsletter/

and tick the box “Stefan’s weekly” and/or the box of any other publication we produce on a regular basis.

I am sorry for the inconvenience, but we are forced to do this because of the newly introduced “General Data Protection Regulation”, which came in law this year in Europe.

But now let us quickly check out the question “why would you bet on one scenario only?” which was asked by one of my regular readers and try to find an explanation for this.

Well, I think the reason why an investor would bet on one single scenario is quite simple, if you get the scenario right and if you get the timing right, you can make a lot of money. Therefore and to some extent betting on one single scenario is speculation. But if you don’t get the scenario right or if you don’t get the timing right or if you don’t get either right you will lose money and maybe get frustrated. As one of my partners keeps saying: “it’s not about being right, it’s about making money” and he is totally right there. Now, when managing other people’s money, like in my case, because that is what I mainly do, the goal must be to protect my client’s assets and to deliver some sort of positive return over time. This is why I wrote about the toolbox-approach some time ago. Various tools for various scenarios and even better a combination of tools to reach some minimal diversification.

The world, nature, people, politics, financial markets, currencies, etc. are in constant motion. Even if you are using various tools for different market cycles and investment scenarios within your strategic or tactical asset allocation it is difficult to make money these days but by betting on one single scenario only, you most probably will miss out on a lot of (other) opportunities. Therefore, and to answer the question, I think betting on one single scenario may lead to very large profits but from my point of view I prefer at least some minimal diversification.

What do you think? Please let me know your points of view!

But please don’t forget (instead of hitting the reply button) to send your messages to:

smk@incrementum.li

If you are still happy to spend a quick moment with me, feel free to read this short text under the following link:

Independent and Flexible Boutique Approach

Many thanks indeed for your interest and participation!

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

Kind regards.

Yours truly,

Stefan M. Kremeth

Stefan’s weekly: Was ist bis zum Jahresende zu erwarten?

Posted on by Stefan Markus Kremeth

Dear Ladies and Gentlemen

Once in a while I receive mails from one or the other reader asking me, why I am still generally positive for equities, while the world is full of problems with trade wars looming, governments piling up more and more debt and central bank balance sheets exploding and you know, Ladies and Gentlemen, I understand this fear and I am also very, very worried from time to time and a long time ago I even I used to invest my personal money according to my fears and never made money. Today I am somewhat more opportunistic, and I don’t bet all my money on one scenario but am rather using the toolbox-approach I was writing about in one of my recent publications, i.e. I like to think in scenarios, weigh my scenarios and construct portfolios accordingly.

Now, I still think many things are all but perfect, but then again, I believe this is just the way it is and this will never really change, and I certainly don’t want to see politicians and central bankers as a bunch of bad guys who primarily want to steel money from their people. I actually believe most of them are happy to do whatever it takes to keep the economy running and to make life as good as possible for as many people as possible, knowing that it will be difficult to please everybody.

With this way of thinking and some help from statistics I personally expect Q4 2018 to be a rather positive one for equities and for example a not so positive one for crude oil. Why is this you may ask, and you are right to ask that question.

Well, on November 6, 2018 midterm elections in the U.S. will be held. Looking at statistical evidence, one can see that in midterm election-years the fourth quarter is a positive one for equities. The reason behind this is that politicians usually do not want to cause negative market impacts and/or turmoil but rather want to present their achievements and this leads to an overall positive investment environment. Just imagine the U.S. and China reaching an agreement leading to a halt of their conflict on trade, tariffs and taxes. Mr. Trump and his fellow republicans could sell it to the electorate as their achievement. In addition, gas prices at the pump station are always a topic during election periods as Americans see inflation on a daily basis at the pump station. This, I think, is why more than one U.S. president tapped into the U.S. strategic oil reserves to ease any potential price increase at gas stations, which may lead to lower or at least not increasing gas prices and thus wouldn’t be positive for crude oil.

Furthermore, yesterday’s performance in the S&P 500 index marked an important positive technical point and maybe this event can be seen as the starting point for the positive Q4 2018 I am personally expecting.

And now, Ladies and Gentlemen, please keep in mind that I can’t foresee the future and whatever I am sharing with you in my weekly mails reflects my very own personal opinion and please keep on sharing your thoughts and ideas with me. Please feel encouraged to do so 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

Stefan’s weekly: Interview mit Andy Häberli, CIO von Profond.

Posted on by Stefan Markus Kremeth

Dear Ladies and Gentlemen

Last week we had the chance to interview Andy Häberli, Profond’s CIO. When looking at Profond’s asset allocation one immediately notices that over 50% of all assets are invested in equities and another 30+% is in real estate. Profond invests mainly in real assets.

Now, Ladies and Gentlemen, there is a good reason for this.

At Incrementum we are also very much in favour of real assets, equities and real estate belong into this group. We furthermore like to approach financial markets with a toolbox containing various investment tools. According to investor’s needs and risk appetite we may offer individual investment solutions. The toolbox approach can be somehow compared to a medical doctor offering various medicines according to patient’s needs. Just imagine a doctor only offering one pill to cure everybody for every disease at all times. This probably would not be a very successful strategy. Same is true for approaching financial markets.

Since we cannot foresee the future and therefore cannot know where financial markets are heading, we have to develop and sometimes adapt a strategy that makes sense even during markets turmoil. A portfolio delivering regular cashflows, even if the market price of the portfolio goes up and down, is already a solid achievement. I am a firm believer of the value of positive cashflows, in fact I think cashflows are never out of fashion. If for example, you are able to generate a positive cashflow of around 4.5% p.a. over 10 years stemming from your portfolio, you have effectively built up some sort of financial safety cushion of 45% without even taking the effect of compounding into consideration.

You will still suffer and go through all the negative feelings during any potential markets crash but the great thing is that your portfolio will continue delivering cashflows regardless of the market prices of the individual holdings in your portfolio.

This, Ladies and Gentlemen, is what Mister Andy Häberli is looking at in Profond’s portfolio. Cash return on invested capital and of course he is very happy to harvest in addition price appreciation on individual investments, but it is the cashflow that makes the difference. This complex and large multi-billion Swiss Francs portfolio, managing pensions of 40’000 policy holders, is successfully run over decades including during difficult times like the financial crisis. Obviously the portfolio was hit during the financial crisis but not only did it recover but it recovered very well and exceeded its initial value by far while distributing above average payouts. This approach of seeking positive cashflows is what we are doing for years for our private clients at Incrementum,as well.

And now, Ladies and Gentlemen, please keep on sharing your thoughts and ideas with me. Please feel encouraged to do so 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

Stefan’s weekly: Are Low Interest Rates a Nightmare?

Posted on by Stefan Markus Kremeth

Dear Ladies and Gentlemen

I received a fair amount of feedback to my last weeklies. Many thanks especially to Robert and Patrick, who are always very challenging readers and ask questions that make me think further (…and usually lead to some more work on my side), Alain, an old friend who shares my passion for travelling to the Far East and studying in the U.K. and Giorgio, a recent acquaintance, very profound fund selector with a vast industry knowhow. Thank you very much indeed!

Now, most of the feedback I received to the question of my last weekly was showing some optimism for the Swiss Equity Markets (and equities in general) for the months to come. That’s just fine with me!

But today, Ladies and Gentlemen, I would like to look at current low interest rates and ask all of you, if from the bottom of your hearts you think they have become a nightmare or maybe not, as there is most probably more than one perspective.

You know, I have a little black book for notes. In this book there is a dedicated page called “low interest rates pros” and a dedicated page “low interest rates cons”. Whenever I come across an idea or a statement pro or con low interest rates, I try to remember it when I’m in front of my little black book and write it down. I don’t need to like the idea and therefore am writing down just about everything on the topic, a bit like in a brain storming exercise. The advantage of this is to avoid as much as possible any sort of “confirmation bias”.

Anyway, I am mostly a critic of ultra-low interest rates but even I must admit that it is nice to see the value of my house going up, while groceries prices are stable, and TVs, cars, laptops and travel arrangements get cheaper and I also must admit that I rather pay mortgage rates of 2% than of 5%. I also can imagine that for any potential seller it must feel much better to sell a lithography of Jean-Michel Basquiat at USD 10’000.00 rather than at USD 500.00. I would call this effect „selective asset price inflation“. There are some goods that become very expensive while for most of us, in our daily life no inflation or very low inflation can be felt.

However, there is also the other side and by far the biggest risk I currently detect in this respect is not the risk of hyper-inflation, (I regard the risk of hyper-inflation as very low at least for the next decade or two) but the risk of not achieving enough investment return on our retirement money. Ultra-low interest rates lead to very low investment returns for pension funds and my fear is that we will be stuck with ultra-low interest rates for a very long time and that this will have a negative influence for pension fund policy holders and even lead (and has lead) to some strange investment behaviour, potentially creating even more risk. Let me elaborate on this.

There are pension funds of mid-size companies in Switzerland that have invested their employees‘ pension money to a large extent into residential real estate close to the companies’ production sites and offices as to offer fairly priced living space to some of their employees. Basically, a great idea. Over the last decades however, some of those companies have moved offices and production sites to low cost countries and at the same time find themselves in a position of an over-ageing workforce in Switzerland. What happens in some of the bad cases now is that such residential real estate held by some of those pension funds become difficult to rent out, while the overaged pension fund at the same time suffers from a negative cashflow profile or in other words sees more outflow than inflow, leading to a liquidity drain. Such pension fund portfolios in addition suffer from a serios lump risk, as the real estate portion of it takes up too much of total assets in %. The real estate can not be sold at the prices needed to match its book value in the portfolio, the pension fund does not want to take a loss and admit under coverage and thus sells in a first attempt all liquid assets to cover the pension fund’s outflows. The longer this situation lasts the more inert the pension fund becomes as its room for manoeuvre diminishes month by month. This maybe looks like an extreme example, but it is also a real example happening today in Switzerland.

Therefore, Ladies and Gentlemen, to me low investment returns due to low interest rates on our pension scheme money is far bigger a risk than inflation over the decade to come and still and to sum it up, low interest rates can represent someone’s loss and someone else’s gain. No?
Now, let me know, do you think low interest rates are a nightmare, yes or no?

Please share your thoughts and ideas with me. Please feel encouraged to do so and 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!

Yours truly,

Stefan M. Kremeth