April 2014

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Diversification of Bank Relationships from the Customer Perspective (and also from the Independent Asset Manager)

As an independent wealth manager entrusted with wealth built up over decades (and often longer) it is important to keep the focus on risks. One risk is that of having a clients assets locked up with one bank and that bank then going into administration. Large banks try to force their independent asset and wealth managers to bring ALL the customers assets to them. This is a fundamental mistake and…



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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…


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Why Europe isn’t as good for Business as the USA

In a recent article which appeared in the FAZ today, Wolfang Eder (CEO) listed a number of reasons his employer Voestalpine was investing EUR 50 million in an auto components manufacturing plant (Georgia) and a whopping EUR 550 million in a steel plant (Texas)  in the US and not in Austria. 1. The Economics Minister sent a very personalised letter to CEO Eder offering help should he require any assistance…


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Economy: Reasonable Prospects of a Pick-up this Year says RBA

Thought this statement from the Reserve Bank of Australia is a good gage of where we currently stand regarding the state of the world economy. Growth in the global economy was a bit below trend in 2013, but there are reasonable prospects of a pick-up this year. The United States economy, while affected by adverse weather, continues its expansion and the euro area has begun a recovery from recession, albeit…


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Thurgauer Kantonalbank IPO – Reasons to be Cautious

These two figures show why TGKP may not be a good investment. See my previous post about the Thurgauer KB IPO. If we took the neighbouring cantonal bank St.Galler KB as a proxy and looked at its loan growth (CAGR +5.6%) and also at Assets under Management compound annual growth rate (AuM CAGR) of -0.8%, we can see that the valuation put on TGKP participation certificates may be aggressive as…