Economics

SMI PR Index 10-year and 30-year chart – Outlook 2019 and Considerations

To help me gage where the stock market in Switzerland is currently standing I find it useful to look at the price action over the last decade, and the last three decades for context. Trade & Geopolitical Newsflow In the last days many bearish articles have been published on websites like marketwatch.com, cash.ch and the mood generally is one of great caution ahead of possible geopolitical risks like Brexit (EU-UK),…

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What is required of Institutional Sales i.e. to Swiss Pension Funds

As I used to work in sales trading I thought it was interesting what investment banks or global players in the industry are currently looking for: At least 5-7 years’ experience in selling investment products/solutions to institutional investors i.e. Swiss pension funds.Master degree, CFA or CIIA preferredEstablished client network is a plusUnderstanding of Swiss pension fund clients, their investment needs and restrictions is preferredUnderstanding of capital markets, proven ability to…




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Buy Shares / Equities or a House?

If you take a look at what the masses are doing, and you subscribe to the opinion that the masses are more often not good investors than vice versa, then currently is a great time to sell a house and buy equities with the proceeds. In my opinion. The following graphs illustrate the issue: I found these graphs at http://zendepot.de/8-immobilien-irrtuemer-teil-1/


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Giovanni de Francisci Gets It – Wisdom coupled with good grasp of History and Psychology

That is what I thought when I watched the youtube clip (https://www.youtube.com/watch?v=r5QsIT0KjkU) of Giovanni de Francisci talking about hedge fund managers. What he said is also just as correct for simple independent asset managers. I have just come through an education programme to become a Certified International Investment Analyst (CIIA) and the amount of modern portfolio theory (MPT) and diversification talk can make people blind to the most interesting investments….


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Price Level Divergence Examples Switzerland vs Germany

Today I was once again hit by how much different the swiss price level is compared to Germany. Take the example of the company Gross Baumaterial AG which trades in building materials. Then compare it with the germany company Toom Baumarkt in Konstanz (swiss-german border). Notice any differences? It seems crossing the german border makes a product +100% more expensive. Graph 1: Gross Baumaterial AG – Werbefax 044 500 92 02  17.1.2015 Graph…


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Could SNB neutralise ECBs QE programme? (at least partially)

Considering that the SNB has such vast amounts of bonds from EU members and obviously isn’t comfortable with the rumoured details of the ECB QE programme (just like the German Bundesbank coincidentaly), one could argue that they will be selling bonds, reducing risk as soon as the ECB QE programme is announced (or even before). Now the interesting question is, considering the size of the SNB balance sheet, and their…


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Efficient Market Hypothesis – Counter Arguments – Series

This headline on Marketwatch.com just now reminded me of the theory you learn in Finance; Efficient Market Hypothesis. Additional pent up supply not on the radar of all investors suddenly coming to the market, or just the possibility of it coming to market can lead to big moves; see below   “Our large early investors, as well as of some of our key insiders … don’t intend to sell immediately…


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Forces behind the Bid in the Equity Market

In addition to central banks who have been aggressively increasing their equity positions (see my post on the SNB equity position) there are now large pension fund systems that are moving toward more international equity proportions and decreasing their bond portfolio size. The state pension fund of Japan manages EUR 908 billion (Milliarden). Of that 67% were in bonds, for example Treasuries. The plan now is to reduce that to…