Werthstein means professional digital wealth management
Investing in our Zeitgeists is an easy way to align your investment portfolio
with your personal beliefs and expectations.
Investing in our Zeitgeists is an easy way to align your investment portfolio
with your personal beliefs and expectations.
Buy only what you understand – in addition to his fairy-tale fortune, Warren Buffett is also known for these clear investor tips. The current zeitgeist could therefore please him.
I think that what we’ve seen from Academia is that increasingly studies have demonstrated that pet ownership can have a very positive influence on human well-being, both physical as well as emotional. And as these insights increasingly enter the mainstream I think that pet ownership can actually rise going forward, and that the 5 percent growth rates for the industry on average on a global level may actually turn out to be too conservative.
Well, it is only 5 percent but I see it as being fairly slow but steady, and as much as anything can be, reasonably reliable. And I like that, to balance out what’s going on elsewhere. And by the way, the valuations, although they’re high, they’re not anywhere near as high as in some of those other Zeitgeists.
Our lives are undergoing profound changes, and digitization is entering almost all areas. Robots are already used massively in industry. They can do things more efficiently and thus faster and cheaper. But they are also conquering more and more private households. Lawn mowing and dust vacuuming are only the small beginning of a trend that cannot be stopped and is therefore also interesting for investors.
The combination of faster computing power and advances in artificial intelligence has raised robotics to a new level. Nevertheless, the topic is still in the children’s shoes. When costs fall and networks are built and accelerated, the sector can grow four times as much as the global economy.
We have already launched the Zeitgeist in September 2016. Since then, the robotics industry has developed far better than the overall market. A lot of capital has been invested. The industry is no longer quite as attractive, but I think it still has a lot of growth potential.
Elon Musk is, like Richard Branson, a gifted seller – among others, for himself. Sharp headlines included. “We want to open space for humanity,” he is quoted as saying. “Space must be affordable for that.” And his rocket SpaceX is the right vehicle for it. But behind the pompous words, a timely investment softly shimmers, which would have been pure illusion just a few decades ago.
Historians have an ongoing debate about whether single people really change the broad course of history or not. Napoleon, Mandela and so on… With space travel, the “old space”, run by governments, is finally starting to move again but “new space”, the private sector, is booming and that’s so much down to one man, Elon Musk.
The key words are affordable and flexible, capable of launching satellites, and bringing larger cargo to the International Space Station. Also demand is growing from states willing to send their own astraunots in the space station, and companies launching geolocalisation satellites, and other communication network devices.
It was not that long ago that star investor Jim Rogers used to slip the people he was talking to one of those little sugar packets just like the ones served at all cafes for your coffee. That is because he wanted to draw attention to the immense investment potential of commodities, especially “soft commodities”. This is just the sort of commodity that everyone needs. He was proven to be correct. It is well known, however, after the boom that the time to invest is before the boom. So where could the next major buzz be, the new and upcoming zeitgeist investment? Right at the point where pleasure and health meet.
Compared to other artificial sweeteners, Stevia is a gift of nature for diabetic and obese people, because it passes through the digestive system without being absorbed. But of course, if big producers are betting on it, there are still two major obstacles to overcome: one, the price is actually higher, and the second – and I can testify for that – is that really Stevia has to sweeten its taste.
These are actually not cheap companies. But we do not invest here because of a low valuation, but because of the high growth rates. You have to weigh the pros and cons. Occasionally, low-rated shares in companies with good growth prospects are obtained. But you usually have to pay for good growth opportunities. And this is the case here.
“Incredible India” is the slogan intended to tempt tourists to India. Incredible India and the high-gloss images of snow-capped peaks, exotic palaces, and palm-frond-edged beaches basking in the sun. The vision of an “Incredible India” was also what investors found so exciting about the subcontinent. A fast-growing and highly-qualified population, fluent in English and computer-literate, these factors alone should have ensured the country scored high in the international sweepstakes. But for many years everything remained nothing more than a promise that got lost somewhere between the morass of political inefficiencies and China, India’s overly powerful neighbor and regional rival. Something has now changed and the country could in fact actually become “incredible”.
The new ID cards are a global first and give India the chance to leapfrog the West in terms of e-banking and digital services, especially since new competition has suddenly opened up the smartphone market.
One key area to consolidate the current rise of India will be education and income redistribution so has to diffuse wealth into a larger group of domestic consumers. But the progressive opening of the country, a service oriented economy and further infrastructure development offer many investment opportunities.
The central bankers’ mantra? Interest rates have to be low in order to make certain the real economy gets the loans it needs. They’ve been saying this in the US for years, as they have in Europe and Japan. However, nuances have crept into the mantra ever so covertly. As a result, bond investors need to listen very carefully. But let’s start at the beginning.
In the US I think the increase in long bond yields is long overdue, and I believe that the 10-year yields will slowly rise to the three percent level as the US economy shows further sign of momentum.
Rising interest rates could indeed be negative for stock markets, especially if rates go up a lot faster than people expect. But, as so often in financial markets, a risk creates an opportunity, and that is the case here: those rising rates can actually be turned into a positive investment opportunity, hedging against them.
Massive tail fins and blinking chromed trimming – back in the 1950s people were already dreaming of simply getting into a car and being driven to their destination. Without studying a map or having to concentrate the whole time on the traffic. Back then it was a vision. And today? Evidently a realistic goal. A trip where investors may be along for the ride.
I see four main structural trends shaping this Zeitgeist – sharing platforms, autonomous driving, electrification, and connectivity. These four topics are inextricably linked and together have the potential to reinforce and accelerate one another.
Autonomous vehicle will be part of a public investment revolution to begin with: public transportation in inner cities, collecting garbages in suburbs. These could be the first areas of deployment of such vehicles.
The next time you consult your physician may be by e-mail or Skype? This is a long way off for patients in Germany: First the phone call, then the diary entry, then the waiting room. And only then the consultation. Many countries are technologically so far advanced that things could be quite different. And investors are fighting for those companies that will enable medical care 2.0.
It is a global healthcare revolution. And interestingly its actually rather late to the market compared to other areas ranging from music or even automobiles which it was gone more rapidly.
ehealth is a great advance for emerging markets, with potential more affordable technologies available, allowing doctors to make diagnosis in remote places, or reducing the cost of medical care and increasing prevention.
Floods, drought, tsunamis, the Munich Re study lists them all and carefully tots the natural disasters up. And concludes that the number of “damage events” between 1980 and 2015 has almost quadrupled. These statistics are by no means about surprising exceptions for the figures are steadily climbing, or so the re-insurers noted in March 2016. At first sight it the politicians who must to act, for example by introducing international treaties and agreements in order to brake the global warming underlying this process. That said, corporations must also act as their production processes contribute to the warming. And the more the companies rethink things, the better for their investors, too. A linkage that is becoming ever more important.
A fair return that doesn’t cost the earth. Environmentally friendly income. A portfolio of bonds that offer a fair return given their credit risk, but also beat the broader market in the environmental, social and governance credentials of the issuers. I like that combination.
Sustainable bonds offer many advantage when issued by well-established borrower and carry a high AAA or AA- rate, they are liquid, less volatile than other asset classes and therefore fit very well in a diversified portfolio that will include SRI compliant investment vehicles.
Elon Musk is a colorful figure in company circles. After all, the entrepreneur who tends to favor smart casual created the electric car marque Tesla seemingly out of thin air, and with his SolarCity is investing billions in renewable energy. And he makes no secret of it. Not only does he provide headlines for the press, but also gets investors thinking. Because Musk shows that business and ecology can blossom in a symbiotic relationship, that you can make money with “sustainability.” As a result, the topic is increasingly taking the public limelight. Even if things sounded very different at the beginning.
Technology has improved and efficiency in producing and distributing green energy is growing
New mobility and the tougher regulatory environment toward fossil energy will continue to push investment toward clean energy. Furthermore the potential rise in the price of oil will support the shift toward clean energy.
I like the new energy zeitgeist not only because it is good for he environment, but also because it rides a global trend. The cost of solar electricity, for example, is falling below the cost from older, dirtier sources. And big cities are starting to insist on clean fuels, too.
When in September 2011 the price of gold hit a temporary high, the investor community very widely assumed the rally would continue. Now, 700 dollars down, they are declaring the end of gold. “Gold will fall below 1,000 dollars” – investment companies and commodities experts have reached a consensus on this. What the value is will soon emerge. Nothing can be excluded as the price of gold can fluctuate very widely in the short term. In 2014, the price plummeted within only a few weeks by more than 20 percent. However, in the long term gold can offer the requisite portfolio diversification, as it often behaves unlike other investments such as equities or bonds.
The key thing – price has actually come down off the peak. In Euro they came down relativly modestly, in dollar a lot. Since we expect a stronger dollar in the future we recommend the in dollar dominated asset Gold for Euro investors.
In 2017 Gold could be a save haven. We have a new U.S. administration which is actually raising the risk of protectionism and of a trade war. And we also have very key elections in Germany and France with the risk that far right parties which want to leave the EU come to power.
Wherever there is talk of the digitization of the economy and Industry 4.0, one technology has been unavoidable for some time now, namely 3D printing. The manufacturers of the new generation of printers are stumbling over ever new potential applications, promising the segment high growth. Yet the shares of these firms have had a real rollercoaster ride in recent years. Precisely because of this, with a view to risks and opportunities now is an auspicious time to enter the market.
“Perfect position in Hype Cycle! Share prices of 3D companies seem to follow almost perfect “hype cycle” with a bubble about 2 years ago that burst. We are now way below peak and if the hype cycle is followed, we would now move into a long period of years of secular uptrend.”
“They even built a house on 3D printing in China! I’m sure, 3D printing is a great tech for medicine and distant production which need to be instantanous, reliable and flexible production and for remote places.”
Currently, it seems that the European Central Bank and the US Federal Reserve bank have once swapped the roles. While the Fed is once more moderate, the ECB is thinking about a turnaround in its monetary policy. The euro then jumps up. But could the rally be ended soon? Giles Keating, President of the Werthstein Institute, reports on this and about news to our Zeitgeists in his market outlook.
A rise in interest rates is poison for stocks, because it increases the attractiveness of bonds relative to equities, whose dividend is uncertain. According to theory! But are interest rates really going to be rising in the near future?
The US Fed has already begun, if only hesitantly. But then at the end of June, there were a few surprise smoke signals from the European Central Bank. President Mario Draghi hinted at a change in monetary policy. Perhaps it was just a test balloon, but the stock markets woke up from their summer lethargy. The German DAX lost almost 500 points in a few days, its rally coming to an abrupt end. Larger correction or small dent, what do the experts from the Werthstein Institute think?
The German DAX has had one of the worst weeks for a long time and is now trading 500 points from its all time high. Is this the beginning of a healthy correction or does the rally on the stock exchanges continue in the summer? Stefan Riße approaches the answer in his report from the Frankfurt Stock Exchange