2019-08-15

“I woke up this morning, feeling round for my shoes
I got up this morning, feeling round for my shoes
You know by that, people, I must have got the walking blues”
Walking Blues – Muddy Waters 

Last month, I wrote about the particular situation relating to the negative interest rate environment in 8 countries – Switzerland, Germany and Japan, plus Denmark, Netherlands, Austria, Finland and France.  As stated “Ladies & Gentlemen, we are in uncharted territory and we have no idea what the consequences will/might be”.  In writing this, I wanted to convey that I, personally, do not feel comfortable with this interest rate situation. 

Well, what I have learned over the last 12 years as an investor & fund manager, is that, even though there are long stints of calm & serenity along the way, there are also some uncomfortable events & looming imponderables, one of which is certainly the relative underperformance of the Fund.  In my view, however, from the macro picture, both politically & economically, during the last 12 years, rarely has the situation been so unclear.  Certainly, we have in the Fund some stocks that I would call “work in progress” and which I am monitoring closely.  In the follow-up to the H1/2019 results & outlook of these companies, I shall be in contact with them, as I usually am, but in the current situation this will be more important than usual. 

So in mid-July, I was pondering the uncomfortable & imponderable whilst taking my annual break.  I did so in a 2-week walking journey through the North of France, allowing me to take stock and get out of my investor’s blues.  The good news is that I’m back & ready.  The bad news is that recession is potentially looming in some European countries, despite low rates & massive monetary easing around the globe. The Fed Chairman’s recent, but expected pirouette is a sign, and he may need even more fancy footwork in the coming year, as will other Central Bankers. 

Dear Investor, I shall share my findings with you when meeting with the companies in the autumn – and remember: 

“Every champion was once a contender that refused to give up”
Rocky Balboa…