DR. MARKUS ELSÄSSER

When are you financially independent? Wealthy? Really rich? For most people, all millionaires are rich people. But the difference in the world of the wealthy and rich is immensely larger than one realises. Are you really aware of the difference between 1 million and 1 billion? Just take a look at this.

Following the sharp fall in the price of the VW shares we are often asked whether we should buy the shares Porsche in the "ME Fund - Special Values". It is true, Porsche is also listed on the stock exchange and the share price has fallen sharply as well. However, it is better to be careful! Appearances in the stock market can be deceptive. The situation with Porsche involves different aspects.

The expansion of Starbucks in the US is impressive. The  "ambience" or better said the "atmosphere " - deliberately cultivated by the company - is the real icing on the cake.

Good properties are an interesting way to invest. Besides "paper assets" like (bank accounts and bonds), equities and direct investments in companies, as well as gold and silver, there are many property investment opportunities which enhance the portfolio.

Investments in real estate are varied. What strategy should you choose to build a real estate portfolio?

Some useful advice – to protect yourself. If there is any period during the week in the market, which you should avoid, then it is the opening of Wall Street on Monday mornings. There are good reasons for this.

My good friend, Dr Rolf Jacobsohn in Singapore, describes the brokerage system on Wall Street when he worked as a broker in the 1980ies and 1990ies.

Who created the conditions for decades of prosperity and dynamism in Hong Kong? A man of whom you have certainly never heard of:

Sir James Cowperthwaite (1915 - 2006). Who was he, and what was the basis of his successful model?

I would really prefer it, if people leave companies alone. Joint-stock companies with a top quality team and a promising business field will, over the decades to come, only do better.

It still pains me, that we had to surrender our holding of Hilti AG (listed on the Swiss Stock Exchange) from our Value Fund “ME Fund-Special Values” as well as the world market leader in chewing gum WRIGLEY (listed on the US stock exchange) as part of Going-Private takeover bids. While we recorded a nice profit, this was a one-time event. In the long term we would no doubt have achieved a far higher appreciation in market value. As far as the failed take-over attempt by Syngenta Monsanto I am not so sure.

There are are a many benefits from countercyclical trading on the exchange. "Always buy straw hats in winter" is an old saying. Only in the next bear market will you realize how much it really hurts to have added shares the portfolio at the top of the business cycle.

Why is it that so many investors make the same timing error over and over again?

Complaints about the decline in the banking industry have been ongoing for a long time. The situation has not improved since the disaster in 2008,

What is the real problem? In the transition from bankers to speculating bankers. But what defines a banker? And what in contrast differentiates speculating bankers?

Once the equity investor decides on a stock, the the question arises, when and how to enter the order. This is where opinions are differ.

In my blog of the 8^th of June, 2015, I pointed to a wave of mergers on stock exchanges abroad: "The breathtaking merger wave is continuing".

Now, only two months later, the rapid pace of company acquisitions is continuing. In a previously unexpected new dimension due to the summer break.  

The media are full of stories about top greedy managers. On the other hand, some are basking in the glow of the press with their "egos” as a supposed Masters of the Universe. As an investor, I have found over the course of many years that true heroes create sustainable value, often act unnoticed and away from the public eye.

Here's an example of an outstanding performance: Martin Gysin, former Chief Financial Officer of Bell AG in Basel ( a Swiss market leader in meat and sausages). He is ranked at the very top in my Hall of Fame. 

Old brokers on the exchange, have always known it: "following markets up and down, empties your wallet".

However, the broker on the stock exchange participates in many transactions.

Knowledgeable investors, however, are characterized by their prudent and calm manner. Following advice they rarely get to hear from bankers: don't do anything!

Many money investors are wondering why they hardly make any money in the stock market over a long period of time.

Wrong timing, entered the marker too late, sold too soon ......

it is always the same. What matters is a clear definition: Am I an investor or am I a speculator? Nothing in between.

But what defines a speculator? And what is the actual difference from being an investor?

The people know it, the politicians know it as well.

Most governments can never repay their accumulated debt.

Hardly anyone dares to confront this problem, let alone propose a serious solution for it. Instead of passing the buck on to the next generation, smart people suggested a solution. Perpetual bonds with no maturity! They would be almost like Shares in the government.

For years value fund "ME Fonds - Special Values" has not ceased to point out that first class listed companies will become a rare commodity. In Switzerland and the USA we have currently an astonishing wave of mergers and acquisitions going on. A trend that is not going to stop so soon. 

German carmaker AUDI AG has more to offer to investors than just the famous AUDI brand and AUDI car technology.

Most shares of quality companies have reached high prices on the stock markets. PE ratio multiples in Germany range between 12 and 18 on average for large companies. But there is an interesting exception, hardly noticed by the investing public: The share of German carmaker AUDI AG, listed in Frankfurt, Germany.

Investors are now being charged a "penalty" interest rate of up to 0.75 % on their Swiss Franc bank deposits. Not all banks have taken this step, but more and more. Instead of earning interest on his money, the investor now has to pay interest. As a solution some banks are recommending to convert the Swiss Francs into another currency or to switch into another asset class like Swiss stocks.The question comes to my mind: Is this really good advice?

For investors the loss of interest income on their cash, savings and term deposits is terrible. But beyond financial considerations there is another dimension to the whole dilemma. Nobody speaks about the effect this has on our children.

For years the bond market has been driven systematically to the zero interest level. As a result more and more money will flow into the stock market. Is there a danger that private investors will eventually exit the stock market, re-discovering the bond market? What kind of interest rates are necessary to tempt them?